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While recession concerns have recently subsided among investors, Jim Paulsen — a 40-year market veteran now publishing on Substack under Paulsen Perspectives — joins Market Domination to discuss why these fears might resurface in 2025.
"I think recession fears lie there just under the surface [Federal Reserve] cut, and it wouldn't take a slowdown here to reignite those fears," he tells Yahoo Finance. Paulsen observes that while markets are heavily focused on the Fed's interest rate easing cycle, new economic policies are pointing toward tightening conditions.
"I wouldn't be at all surprised if real GDP [gross doemstic product] slow[s] down to about 2% here in 2025, maybe even falls a little below that, and I think that's going to reignite some recession fears," he explains. Paulsen also points to rising unemployment rates as a potential trigger for market sell-offs.
"We haven't had a correction in almost a year and a half and I think we're due for one," he tells Yahoo Finance, adding that such a correction could present an attractive buying opportunity for investors.
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This post was written by Angel Smith