Recession Warning: BCA Research Predicts US Stock Market Volatility and Potential Recession in 2025

The United States economy is facing another blow following the COVID-19 pandemic. Concerns about the stability of financial markets have resurfaced, with BCA Research predicting volatility in the US stock market moving forward. BCA Research chief global strategist Peter Berezin has warned clients that the economy may fall into a recession either this year or in early 2025. According to Fox Business, Berezin predicts that the S&P 500 could drop to 3,750, a 30% decrease from current levels.

Berezin’s prediction is based on his belief that the labor market will slow significantly in the coming months, which will impact consumer spending, a key driver of economic growth. The relationship between inflation and unemployment, known as the “Phillips curve,” is a key factor in his analysis. He explains that the US avoided a recession in 2022 and 2023 due to the economy operating along the steep side of the Phillips curve, resulting in an “immaculate disinflation.”

Berezin also forecasts challenges in the global economy, with notable slowdowns in growth expected in China and Europe. This could lead to increased pressure on international stock markets. Despite hitting a record high in mid-May, the Dow Jones Industrial Average has dropped from those peaks.

This grim prediction comes at a turbulent time for financial markets worldwide, with rising interest rates and inflation concerns adding to uncertainty and volatility. It’s unclear whether this pessimism is justified or if it’s just temporary market fluctuations. Nonetheless, it’s clear that investors will need to remain vigilant and stay informed about any potential risks or opportunities ahead of them.