Renowned Forecaster Predicts Economic Collapse by 2026

Renowned economic forecaster Gary Shilling, famously known for his accurate bearish predictions and for getting fired from Merrill Lynch due to his accurate prediction of the 1969-70 recession, has recently flagged a potential economic collapse by 2026.

In a recent interview with Business Insider, Shilling asserted that a U.S. recession is almost inevitable by the end of the year. He cites a stagnant housing market, negative corporate investment indicators, and a weakening consumer base as the main drivers of this potential economic downfall.

Is the Stock Market Due for a Major Correction?

Shilling also warned about the potential for a major correction in stock market prices. “Stocks are very expensive and there probably is a major correction coming somewhere in the relatively near future,” Shilling said. “A decline of 20% or 30% is no big deal by historical standards. So I would say that’s probably in the cards.”

Factors Impacting the U.S. Economy

Shilling further outlined the state of the U.S. economy, highlighting three key factors that could potentially lead to a recession. These include the rising number of foreclosures, a collapse in capital expenditures, and the Federal Reserve’s stubbornly high inflation gauge.

He also pointed to the Federal Reserve’s preferred inflation gauge, which remained high in March, rising 0.7% month-over-month and up 3.5% from a year ago.

Divided Views on the 2026 Economic Outlook

Opinions among other economists about the 2026 economic outlook are divided. Alicia Levine, BNY Wealth Head of Investment Strategy and Equities, argued against the possibility of a recession, while billionaire investor Leon Cooperman shares Shilling’s viewpoint, foreseeing a potential economic downturn.

“My own view is, there’s a lot of problems out there. The market’s too highly valued,” Cooperman said.

Find more economic insights on Fox Business

How to Mitigate the Risk of Economic Downturn?

As for potential solutions to prevent an economic downturn, Shilling believes that both fiscal stimulus and a stronger consumer are unlikely. “That’s really on very thin ice in terms of income, in terms of people’s willingness to spend,” Shilling said.

Get more economic insights on the go with Fox Business

Read More US Economic News