The U.S. economy could face a double-dip recession next year, in the absence of stimulus measures and extended incentive programs, Kirby Daley, senior strategist at Newedge Group, said Monday.
"Without the U.S. extending stimulus, extending incentive programs in a big way, we could be in a double-dip recession in the U.S. in 2010, by the end of the 2010, putting the world economy back into a very bad state," he said.
Last week, the Federal Reserve said that exceptionally low rates would be with us for an extended period of time. In Europe, the European Central Bank hinted at a future exit strategy, saying it would not extend its liquidity-boosting program next year.
Over the weekend, Group of 20 finance ministers and central bankers met in Scotland and pledged to prepare strategies to end emergency support for their economies, but to keep the aid flowing until the recovery was assured.
The timing of the implementation of the exit strategies will be "the most important issue that we're going to be facing in the coming years," Daley said.
The removal of stimulus measures may be "a long, drawn-out process in some cases," he added.