A 50% decline would certainly count as extreme but

 may be necessary to flush out the extreme market overvaluations.

Swiss money manager Felix Zulauf. Unfortunately, he thinks a slowdown is coming that will hit markets hard.

Here’s a (too short) excerpt from the 14-page transcript of Felix’s interview with Ed D’Agostino.

I do believe that such a recession will be short, not long. It could be deep because I think the Fed and other central banks are overtightening. They drive forward by looking into the rearview mirror because inflation is a lagging indicator, and monetary policy is a leading indicator.

“So, I think they overtighten, and it could be a sharp or deeper recession, but much shorter because once it’s here and once it’s recognized, the Fed and other central banks will come in and turn around and go from tightening to easing relatively quickly.

So, we’ll have a second cycle of rising inflation into ’26, maybe even ’27, and that will bring on higher interest rates, higher bond yields, and a tightening again by central banks from ’24, ’25 onwards. And that should lead to a recession.

“And I think the next recession will be a very deep

John Mauldin 26 May 2023


Felix Zulauf



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