Treasuries Offer Value While Stocks Are at Risk, Investors Say

A clear majority of investors expect a US recession before 2024 is out, leading them to view the current bull market in stocks as ephemeral and to favor long-term US Treasuries.

That’s the takeaway from the latest Markets Live Pulse survey, which showed that roughly two-thirds of the 410 respondents anticipate a downturn in the world’s biggest economy by the end of next year. A minority of 20% of pollees even see a slump in 2023, at a time when the Federal Reserve’s own staff have ditched their recession forecast altogether.

Two Thirds See a Recession by the End of 2024

Survey respondents appear to be looking past the economy’s current resilience and anticipating further damaging ripple effects from the Fed’s 5.25 percentage points of cumulative tightening over the past 16 months. The Fed lifted its benchmark rate to the highest in more than two decades last month and Chair Jerome Powell signaled additional hikes are possible.

The poll results are consistent with pricing in fed funds futures, which show traders expect the central bank to cut interest rates multiple times in 2024, by more than one percentage point in the aggregate, ostensibly in response to eventual economic weakness.