Also Read | Mint Primer: US GDP contracts 0.3% in Q1 — why the IMF still sees no recession
So our view isn’t that a recession can’t happen, but that it’s unlikely. That said, assets like Bitcoin, which are highly leveraged and have been imploding, suggest there could be leverage risks in the system, usually where problems arise. The US Federal Reserve has room to cut rates if needed in a recession. With my experience as a value contrarian, when everyone agrees, I get sceptical. Recession may not be the right term; economic uncertainty fits better. Inflation could surprise on the upside, potentially causing stagflation. A shift in investor sentiment around AI could also hurt specific stocks, and given their size in the market, the impact could be significant.
