Economy to Lose Steam—Expect W-Shaped Recovery: Strategist

Expect a W-shaped recovery going forward, said Robert Ward, director of global forecasting at The Economist's Intelligence Unit. He shared his market outlooks.

“You have to remember that this is going to be a very weak recovery,” Ward told CNBC.

W-Shape Recovery on the Cards
W-Shape Recovery on the Cards   

Ward said the economic growth in the fourth quarter was highly driven by stimulus and inventories.

“So yes, we’re looking for the economy to start losing steam,” he said. “Yes, some improvement in unemployment over the next few months—but nothing dramatic as optimists had hoped.”

Meanwhile, Ward said he sees the Federal Reserve raising interest rates in the third quarter.

“The Fed will be wanting to signal to the markets that it is looking at inflation very seriously, just a symbolic nudge, but it won’t be anything too dramatic and the rates will in the U.S. be low,” he explained. “And even if we have rate rises, will be low into 2011 as well.”

  • Watch Ward's Previous Appearance on CNBC (Dec. 20, 2009)

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More Market Views:

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CNBC Data Pages:

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CNBC Slideshows:

  • Cramer's 12 Stocks to Play the Recovery

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Top Dow Gainers (As of late morning):

Caterpillar

Merck

General Electric*

DuPont

Alcoa

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Disclosures:

No immediate information was available for Ward or his firm.

*GE is the parent company of CNBC and CNBC.com.

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