Acclaimed economist David Rosenberg has voiced concerns over an impending recession in 2024, which he believes may lead to stock market instability.

What Happened: Rosenberg on Wednesday warned of a potential economic downturn. He highlighted that such a situation could take investors by surprise, much like the events of 2007 and 2000, according to a report by Business Insider.

“I think it’s premature to throw in the recession towel like so many others have [just] because it hasn’t happened yet,” Rosenberg told CNBC. He compared this way of thinking to expecting no winter because there hasn’t been any snow in December.

The economy’s robustness in 2023, despite the Federal Reserve’s harsh interest rate hikes, was largely attributed to fiscal stimulus. However, Rosenberg predicts this positive trend could reverse in 2024, potentially decreasing economic growth by 1.2 percentage points.

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Although election years typically see strong stock market gains due to the “election effect,” Rosenberg believes 2024 will not follow this pattern. He cites a lack of fiscal stimulus and the lingering effects of the Fed’s tightening as key factors.

Despite the Dow Jones Industrial Average soaring to a new record high last month, Rosenberg cautioned investors about the overvaluation of stocks and an inevitable recession.

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