'Obama's Friend' John Rogers: "US Will Avoid Recession This Year"

"Fed Controls Inflation... US Stock Market to Rise Over 10%"

[Asia Economy Reporter Haeyoung Kwon] John Rogers, chairman of Ariel Investments in the United States, stated that "the U.S. will avoid a recession this year." He also predicted that the stock market would rebound by more than 10%. This statement has drawn attention as it comes amid international organizations such as the World Bank (WB) significantly lowering growth forecasts and anticipating a recession this year due to monetary tightening by major countries including the U.S.

According to Bloomberg News on the 12th (local time), Chairman Rogers attended an annual event gathering Chicago businesspeople and said, "The U.S. Federal Reserve (Fed) is controlling inflation." He added, "The Fed is doing the right thing regarding the money supply," and "I have a much more optimistic outlook now than a year ago. The worst is already behind us."

Although concerns are rising that the Fed's consistent tightening stance will accelerate the recession this year, it is expected to be a positive factor for the economy by successfully curbing inflation. Rogers predicted that the Fed would reduce the inflation rate to around 4.5% this year. In fact, the U.S. Consumer Price Index (CPI) for December last year, released on the same day, rose 6.5% year-on-year, showing a slowdown in the rate of increase. This is a significant decline from the 9% range in June last year.

Rogers founded Ariel Investments in 1983, the first black-owned asset management firm in the U.S. He is a longtime friend and supporter of former U.S. President Barack Obama and his wife, contributing to Obama's presidential and re-election successes. Last year, he also predicted the surge in inflation and the collapse of the Bitcoin bubble.

He forecasted that the U.S. stock market would rebound successfully this year, unlike the sluggish performance last year.

Rogers said, "The Dow Jones Industrial Average is expected to rise more than 10% this year, and the S&P 500 index is likely to increase even more," and revealed that he is "all-in" on U.S. stocks. He expects strength to continue mainly in cyclical stocks that rise during economic expansions. He particularly predicted good performance in automobile, housing, and real estate-related stocks. He also mentioned keeping an eye on advertising and leisure-related stocks.

He emphasized, "U.S. stocks are where we should be," and "the country always finds ways to solve problems."

However, he expressed a negative outlook on the Chinese market and Bitcoin. Regarding China, he warned that investors should be cautious as there is a possibility of a real estate market bubble bursting. About Bitcoin, he evaluated that "there is no visible intrinsic value."

Regarding Rogers' economic outlook for this year, Bloomberg explained that it "differs from the Chicago faction's view, which expects a 'mild recession'." Randall Kroszner, a University of Chicago professor and former Fed governor, recently predicted that "the Fed will raise the benchmark interest rate to 5.5%" and expects a mild recession by the end of the year.

Byron Wien, vice chairman of Blackstone, known as the "Wall Street oracle," also previously forecasted a stock market rebound this year but expected the U.S. economy to enter a mild recession phase. In his "10 Surprises for Investors" report released earlier this month, he predicted a "mild recession" and said, "a recovery comparable to 2009 will begin."