Prepare for US recession

THE EDITOR: An inverted yield curve has occurred before the last seven US recessions. This year the gap between the two-year and ten-year treasury bond yields turned negative (inverted yield curve) .On August 14, the Dow Jones Industrial Average dropped 800 points, the worst decrease of the year.

At the end of July the Federal Reserve cut interest rates by 0.25 per cent but that did not stimulate the US economy. Surely, more rate cuts will occurr in the near future but a US recession is extremely likely within the next 18 months.

Since the TT economy is dependent on the US economy for tourism, remittance and trade, we need to adjust and prepare. The Central Bank needs to increase its reserve to have ammunition to stimulate the economy as necessary.

There is no need to panic, this is a cyclical phenomenon, although this recession will likely be enormous – possibly global.

BRIAN ELLIS PLUMMER

via e-mail