Equity Mates Investing Podcast Is a recession baked in? - Kellie Wood | Schroders
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May 15, 2025 Kellie Wood, Head of Fixed Income at Schroders, shares her insights on the potential for a significant financial crisis if the U.S. continues its current policies. She discusses the importance of strategic portfolio positioning amid rising national debt and inflation. The conversation delves into the implications of U.S.-China trade relations, advocating for defensive investment strategies and diversification to navigate market volatility. Additionally, Kellie highlights the growing accessibility of investment products for retail investors, emphasizing financial education.
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US Economy Faces Stagflation Risk
- The US economy faces a shift to stagflation driven by tariffs and slowing growth, harming GDP and increasing inflation.
- Market volatility is high as investors reassess risks due to this challenging economic environment.
US Recession Risk Rising
- US recession probability rose from 35% to 65%, signaling growing concern among analysts.
- Markets remain complacent and have not fully priced in the risk of an imminent recession.
Unsustainable US Debt Growth
- US debt is becoming unsustainable with growth likely falling below interest rates, increasing default risk.
- Federal interest expenses are outpacing major budget areas like Medicare and defense, highlighting fiscal stress.