Gold News

Expert predicts worsening US economy

A leading investment expert has forecast that a recession will take place in the US this year.

Speaking to Bloomberg Television, Pequot Capital Management chief investment strategist Byron Wien also said that stocks are likely to fall by about ten per cent in 2008, with the Standard & Poor's 500 Index undergoing a rally during the second half of the year.

He stated that he also believes the Federal Reserve will slash the benchmark rate of interest to under three per cent - compared with the current level of 4.25 per cent - while gold prices will reach $1,000 an ounce.

"It's going to be a tough year to make money," Mr Wien commented, adding: "People underestimate the significance of what's going on in the housing business and the credit market."

Meanwhile, minutes from the December 11th meeting of the Federal Reserve have suggested that some members of the central bank's Federal Open Market Committee believed that any further credit tightening could need "a substantial further easing of policy".

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