Not everyone is predicting a rosy economic scenario for 2007. There are some who think we could have some hard times this year. One of those is Emanuel Balarie. He's senior market strategist at Wisdom Financial. On "Power Lunch," Balarie says the U.S. housing market is still a concern. In fact, he says that besides housing---recession and inflation are major concerns as well.
Balarie says that even though recent numbers show rising housing sales, there is still a lot of inventory out there--and that a lot of houses are still on the market. Importantly--Balarie points to the Fed and what they might do with interest rates. Balarie says the Fed is "data heavy" when it comes to moving rates up or down--and if the Fed sees numbers moving toward higher inflation, rates will go up.
Tie in slow moving housing market and you've got trouble according to Balarie.
In the end, Balarie believes we could have a very hard landing this year--and not the soft landing other economists and analysts are predicting.