As markets have been in rapid decline for almost two weeks, investors are seemingly contemplating a likelihood of a hard landing orchestrated by the Federal Reserve (Fed). August’s hotter-than-expected consumer price index (CPI) data caused a selloff in the markets as more bruising of the economy is expected in the near future by Fed’s rate hikes.
Furthermore, according to data from Google search trends, searches for “upcoming recession” soared 247% in the past year, accrued by Cinch Home Services and shared with Finbold. Moreover, searches for “recession” are also up by 355% in the last year as costs of living increase around the globe.
Among those searching for “upcoming recession,” South Dakota had the highest search frequency, with 1.1 searches per 100,000 Americans. Meanwhile, when it comes to a housing recession, Nevada, California, and Colorado lead the pack.
During the 2008 housing crisis, states like Florida and Texas were the ones that felt the squeeze most profoundly; therefore, a cooling housing market is pushing residents to search for more information on a potential new housing crisis in the US.
In essence, as Finbold reported a few weeks ago, this time around, the cooling market seems to be more tied to the liquidity crunch due to the Fed pulling funds out of the markets, coupled with rising interest rates.
Despite there still being a possibility of a housing crisis proportionate to the one seen in 2008, the banking sector, this time around, is in a much better position; therefore, the knock-on effects seen in 2008 should not be as severe.
Regardless, worries of a potential recession might be justified as the global macro events look bleaker by the day.
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