Allianz, one of the world’s largest insurance companies, has warned that the U.S. economy is headed for a crash landing. Analysts at the insurance giant “expect economic momentum to deteriorate in the second half of the year on the back of sharply tightening credit conditions exacerbated by the banking crisis.”
“Crash Landing Ahead,” Allianz warned
Allianz’s research and analysis division released a report last week stating that the U.S. economy is “headed for a crash landing.” Allianz is one of the world’s largest insurance companies, with more than 122 million individual and corporate customers worldwide and more than 159,000 employees. The company is headquartered in Munich, Germany.
An Allianz analyst began by saying that “the dying U.S. banking sector and the negative confidence impact of the unresolved energy situation in Europe will shape the rest of the year.” The Allianz analyst noted that the U.S. economy “picked up the pace in early 2023,” but stressed that this revival is likely to be “short-lived.” The analysts continued:
They expect economic momentum to deteriorate in the second half of the year against the backdrop of a sharp credit crunch exacerbated by the banking crisis.
Several major U.S. banks have recently failed, including Silicon Valley Bank and Signature Bank. The Federal Reserve and the Treasury took steps to prevent a systemic crisis by providing liquidity to the banking system, creating a new lending facility to provide short-term loans to banks, and insuring all deposits at both banks.
Analysts at Allianz predicted a major recession (“hard landing”) in the U.S. at the end of the year “as higher interest rates further raise borrowing costs and curb investment, slowing housing, manufacturing, and construction, and as negative credit effects increasingly take hold. We further elaborate in our report.”
Many have similarly warned that the U.S. economy is headed for a hard landing. Prominent economist David Rosenberg predicted a recession and a crash landing in March, based on data from the Federal Reserve Bank of Philadelphia. Robert Kiyosaki, author of “Rich Dad, Poor Dad,” also warned of a crash landing because of the federal bailout following the banking crisis. Meanwhile, billionaire Barry Sternlicht predicts a hard landing for the U.S. economy.
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