Despite concerns about a potential recession as the Commerce Department reported late last week that U.S. gross domestic product unexpectedly fell at a 1.4% annualized rate in the first quarter of 2022, recession fears may be overblown, according to Jeremy Siegel, senior investment strategy advisor at WisdomTree and professor of finance at the Wharton School of the University of Pennsylvania.
“I understand all the recession talk,” he said Monday, in his latest weekly commentary.
“The Fed was slow to catch onto inflation and they likely will then be forced to over-react to inflation and then be slow to change when we do get a slowdown. But at a minimum the Fed needs to get to a neutral policy rate,” he said in this week’s commentary, “GDP Raising Questions About Health of Our Economy.”
But he added: “I emphasize again that I do not see a recession this year.”
A recession is defined as two straight quarters of negative GDP growth, typically accompanied by a slowing economy and higher unemployment. Although Q1 GDP declined after a strong Q4, the unemployment rate has continued to shrink.
Siegel provided seven predictions in his latest commentary, including that there won’t be a recession this year. Check out all his predictions in the gallery above.