Barry Knapp, managing partner and director of research at Ironsides Macroeconomics, has expressed concerns about the state of the U.S. economy, suggesting that a recession could be on the horizon by election day.

What Happened: Knapp shared his views on the economy during CNBC‘s “Squawk Box” on Tuesday. He voiced his concerns about the market and the economy, while maintaining a positive outlook on tech spending.

Knapp pointed out that the earnings story looks weak, with estimates going down for the most part. He expressed particular concern about the labor market, stating, “The underpinnings of the U.S. economy are very weak.”

He also highlighted the struggles of the small business sector, which he believes is growing at a much slower pace compared to large business employment. Knapp suggested that aggressive rate cuts are needed to help small businesses.

“It wouldn’t shock me if we were in recession by election day,” Knapp said. He emphasized that the Federal Reserve needs to act quickly to prevent a potential recession, but he is not convinced that they are prepared to do so.

See Also: JD Vance Lashes Out At Kamala Harris For Allowing Chinese Battery Plant In Michigan: She Wants To Pay Communist Party To Build Factories On American Soil

Why It Matters: Knapp’s warning comes amid a heated election season, with economic strategies of Kamala Harris and Donald Trump under scrutiny. Trump’s aggressive tariff proposals and Harris’ commitment to tackle corporate “price gouging” have stirred debate among economists and Wall Street magnates.

Meanwhile, BitMEX co-founder Arthur Hayes suggested that the Federal Reserve's upcoming monetary policy decisions could be strategically aligned with the November U.S. presidential election, potentially stimulating the stock market in the run-up to the polls.

However, a top economist has warned that a robust AI stock rally fueling the stock market bubble could face an early burst if Trump wins the 2024 election, due to his proposed policies on tariffs and immigration.

Did You Know?

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari