USA recession is now anticipated in the first half of 2025, marking the most significant economic downturn since the 2008 financial crisis, warns Nigel Green, CEO of global financial advisory firm DeVere Group.
In a note, Green highlighted growing economic pressures that make a downturn increasingly inevitable. He cautioned that investors must brace for both risks and opportunities as global markets react to the economic strain.
“The cracks in the U.S. economy are widening,” Green stated. “Erratic trade policies, prolonged high interest rates, persistent inflation, and geopolitical uncertainties have created an environment of deep economic fragility.”
Consumer spending—long the backbone of U.S. economic resilience—is showing signs of fatigue, with retail data indicating that households are prioritizing essentials over discretionary purchases, a classic sign of a slowing economy. Meanwhile, businesses are scaling back investments and expansion plans due to weakening demand and squeezed corporate margins.
The Federal Reserve’s federal funds rate remains at 4.25%–4.50% following its January 2025 meeting. While these rates were kept high to combat inflation, the economic strain is becoming increasingly evident. Mortgage rates remain elevated at around 6.65%, dampening consumer and business sentiment.
Green anticipates that the Fed will be forced to cut rates to counteract the downturn, but he warns that the effectiveness of such cuts is uncertain, as recessionary pressures are already well-established.
The global implications of a U.S. slowdown could be severe, with major trading partners—including Europe, Latin America, Australia, and Asia—facing declining export demand. Emerging markets with high debt exposure are particularly vulnerable, while currency volatility is expected to rise.
Within corporate America, recession fears are already shaping behavior. Hiring freezes and layoffs are increasing across industries, while private equity firms are pausing acquisitions due to valuation concerns. Credit markets are tightening, putting pressure on small businesses reliant on accessible financing.
Financial markets are also reflecting recession fears, with the Nasdaq and S&P 500 entering correction territory. Yet, even in a downturn, Green sees opportunities.
“Defensive sectors like healthcare and consumer staples are better positioned to weather the storm,” he noted. “Safe-haven assets, such as gold and high-quality bonds, will likely see increased demand.”
Green advises investors to reassess portfolios, hedge against volatility, and seek strategic reallocation towards quality equities, defensive assets, and global diversification.
“The countdown to a U.S. recession has begun,” he concluded.
