Billionaire and hedge fund legend Steve Cohen reportedly believes that the US economy is not yet over the hump despite positive developments over the last few weeks.
At the Sohn Investment Conference in New York, the head of Point72 Asset Management says there’s a 45% chance that the US will enter a period of economic contraction, reports Bloomberg.
“We aren’t in a recession yet, but we have significant slowing growth.”
Cohen predicts that the US economy will grow by 1.5% in 2026, noting that the figure is “OK but not phenomenal.”
Data from Trading Economics shows that the US GDP has grown 3.2% on average from 1947 until 2025.
Turning to the S&P 500, Cohen notes that the stock market’s abrupt reversal after falling to a low of 4,835 points in April is “unusual,” comparing the move to the rallies witnessed after the March 2020 Covid-induced collapse.
For now, the billionaire says it is within the realm of possibility for the S&P 500 to retrace by as much as 15% or just move sideways in the coming months.
“Markets don’t have to go up every year. Markets can go sideways and that’s perfectly normal.”
As for the Federal Reserve, Cohen thinks that Chair Jerome Powell will keep interest rates steady to cushion the economy against tariff-induced shocks.
“They are going to be worried about inflation from tariffs.”
Cohen is not the only one to sound the alarm about the possibility of the US entering an economic recession. Last week, JPMorgan Chase CEO Jamie Dimon said that a US economic downturn is something he wouldn’t take off the table at this point, even after the White House signed a trade truce with China last week.
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