Recession Unlikely in First Half of 2020, Says Mellon Investment Strategist

The Fed is likely to cut interest rates twice more in 2019, the 2020 presidential election will have little to no effect on a booming economy, and the answer to the question everyone wants to know about the likelihood of a recession in the coming months is a resounding no.

The mostly rosy economic forecast laid out by Boston investment strategist Jeff Mortimer, of Bank of New York Mellon, to a recent gathering of Sentinel clients and guests is based on data that Mortimer swears by: unemployment, inflation and interest rates.

“Let them talk about things like Brexit, the national debt, political parties–those things tell you nothing of value when it comes to financial markets and the economy,” said Mortimer, a regular on CNBC. “Pay attention when the unemployment rate cycles a half a percentage point up or down. That, along with the price of copper, is one of the best indicators of economic recession.”

The August 13-14 events were hosted by Sentinel in conjunction with partners Bank of New York Mellon and Affluence Financial Group, with about 100 invited guests in attendance. The economic outlook events are part of an annual thought leadership series that aims to give Sentinel clients and stakeholders leading insights to help inform their investment and risk management planning for the coming year.

Mortimer is well known for his unique, behavior-based view of the stock market, which contends that the reason many investors are not better at playing the market is because they allow their emotions to override historical truths. Learning to spot parallels in economic and investment cycles is not terribly difficult, Mortimer says, and can help investors capitalize on market opportunities when others are acting out of fear and other misguided emotions.