Coronavirus recession may already be here, market strategist says
BNY Mellon chief strategist believes economy will bounce back by third, fourth quarter
The U.S. markets looked beyond coronavirus when it was just in China because it seemed to be an isolated illness, BNY Mellon chief strategist Alicia Levine tells FOX Business' Gerry Baker.
There’s a 50 percent chance the fallout from the coronavirus outbreak will drive the United States into a recession this year, according to BNY Mellon Chief Strategist Alicia Levine.
“We’re probably headed towards one in the month of March, certainly by the second quarter,” Levine told FOX Business' Gerry Baker on WSJ at Large. “Some people think we’re here already.”
WHAT TRIGGERS AN ECONOMIC RECESSION?
The bigger concern, Levine explained, is how long it will last.
“The question is, do you have an entire year which is in recession?” she asked. “We think that’s actually less of a chance because we see a bounce back starting in the third, fourth quarter of this year.”
A trader has his head in his hand on the floor of the New York Stock Exchange, after the stock market suffered its biggest drop since the Black Monday crash of 1987. (AP Photo/Richard Drew)
Levine compared the fast-moving impact of the coronavirus to another major event that shocked the financial markets almost 20 years ago: 9/11.
AS CORONAVIRUS SPREADS, RECESSION INCREASINGLY LIKELY, ECONOMISTS WARN
“There was a sudden stop [during 9/11], right?" Levine recalled. "We call that a sudden stop, when, all of a sudden, all economic activity stops. And it depresses growth, it depresses demand, and then it recovers at some point.”
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Despite the depressing prognostication, Levin believes by the third or fourth quarter, America will start to see growth return.