Comments from HSBC on what can be done in the case of a US recession:
HSBC see the risk of recession coming from:
- "a rise in US wages which leads to a falling profit share and a major equity decline; a series of systemic failures within the non-bank financial sector; a major weakening of the Chinese economy, sending shockwaves around the world; and a premature attempt by the Federal Reserve to normalise monetary policy"
They say that "in all recessions since the 1970s, the US Fed funds rate has fallen by a minimum of 5 percentage points"
But ... "That kind of traditional stimulus is now completely ruled out."
So, what then? HSBC reckon fiscal policy will have to be used along with monetary policy
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Fiscal policy? Good luck with that.
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Ryan asked a similar sort of question: Could we see QE 4 from the US?
