Top economist Gary Shilling says a recession and a deep stock-market plunge are likely by year-end

"Shilling believes the S&P 500 could end up tumbling by as much as 30%, with the bear-market decline potentially arriving by the end of the year."

"The housing market remains largely frozen as markets expect interest rates to remain elevated, leading to a significant slowdown in buying activity."

"Capital expenditures have collapsed across the private sector, with broader capex growth down to 3.9% at the end of last year from over 24% during the pandemic."

"Americans are starting to feel the pain of the latest inflation surge, with energy prices increasing 12.5%, adding to the cumulative price increases since the pandemic."

Gary Shilling predicts an imminent US recession due to vulnerabilities in the economy. He anticipates a significant stock market correction, with the S&P 500 possibly dropping by 30%. Factors contributing to this outlook include a frozen housing market, collapsing capital expenditures, and pressures on consumer spending. Despite steady growth in personal consumption expenditures, Shilling believes spending will decline due to inflation and rising energy prices. He sees little chance of fiscal stimulus or consumer strength preventing the downturn.

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