Credit Investors Believe an Economic Recession is Right Around the Corner for the United States
Jose Nino
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Per a survey by the International Association of Credit Portfolio Managers, an increase in corporate defaults is expected to occur in the next year. 81% of fund managers believe defaults will be rising in the next months.
For North American corporate entities, 86% of respondents believe defaults will be on the rise. In a similar vein, 91% of respondents believe defaults will be rising in Europe.
“Our members have expected to see the impact of rising interest rates for some time and we’re beginning to see more credit stress and defaults in corporate borrowers now,” Som-lok Leung, IACPM’s executive director, declared in a statement. “Unfortunately, this could take some time to work its way through the system.”
Similarly, poll respondents overwhelmingly believe a recession will occur in the US, with 84% expecting one to take place sometime in 2023. Similarly, 61% of participants believe a recession will take place in 2023 in Europe and the United Kingdom.
IACPM survey respondents believe certain industries such as health care, medium-sized tech companies, and defense manufacturers will face harsh times in the current economic climate.
The IACPM is made of over 130 financial institutions across 30 countries. Its members include portfolio managers working at commercial banks, investment banks, and asset managers, per the website’s information. Clearly the economic situation in the US is not good. It’s going to take serious economic reforms such as downsizing the regulatory state and putting the clamps on central banking to get economic matters in order in the US.
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