Wednesday, June 22, 2011

Chances of US going into recession at 30%

KUALA LUMPUR:'' There is a 30% chance of the US going into a recession due to slowdown in spending, HSBC's chief US economist Kevin Logan warned.

"Falling house prices is a burden for the household sector. That in itself is not likely to create a recession. "But now that (higher) gasoline price adds another complication as it adds another blow to the household sector, as it siphons away income," he said on Wednesday, June 22

Logan also said that it is unlikely for the US to implement a quantitative easing (QE3) due to inflationary pressures, smaller 'pay off' and risks to the US Federal Reserve's balance sheet.

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