US to hit recession in 2007
US investment guru George Soros has warned that rising US interest rates could coincide with a crash in the housing market next year.
He claims a simultaneous drop in the dollar and a sell-off in the bond market could bring about a recession in the world’s biggest economy that could have global consequences.
The Federal Reserve has increased interest rates from 1% to 4.25% since June 2004, but a monetary time-lag means the impact of this fiscal tightening has not been felt as yet.
Soros expects rates to peak at 4.75% this spring, accelerating a downturn in the economy