The United States may be in the midst of a recession, but according to one strategist, it won’t be as severe as previously predicted. In fact, the rise of artificial intelligence may play a role in propping up the stock market.
The COVID-19 pandemic has certainly taken its toll on the US economy, with millions of Americans losing their jobs and businesses struggling to stay afloat. However, Nancy Tengler, chief investment officer at Laffer Tengler Investments, believes that the recession will be mild.
Tengler cited the unprecedented stimulus measures taken by the government and the Federal Reserve as reasons why the recession won’t be as severe as previous ones. “We have massive bailouts going on, both on the monetary side and on the fiscal side, and we’ve never had that kind of support,” she said in an interview with CNBC.
But perhaps the biggest factor in keeping the economy afloat, according to Tengler, is the rise of artificial intelligence and the tech industry. She believes that the AI craze will help prop up the stock market and prevent a more severe recession.
“The tech industry has been the canary in the coal mine of this pandemic,” Tengler said. “And I think the rapid adoption of artificial intelligence and machine learning is going to keep that sector growing and expanding, and that will spill over into the broader economy.”
Tengler’s prediction isn’t without precedent. The tech sector has been one of the few bright spots in an otherwise bleak economic landscape. Companies like Amazon, Microsoft, and Apple have seen their stocks surge even as other businesses struggle.
The increased demand for technology and automation as a result of the pandemic has only accelerated the trend. In fact, some experts predict that the adoption of AI and other advanced technologies could lead to a “Fourth Industrial Revolution.”
Of course, there are risks associated with such a trend. The greater reliance on technology and automation could lead to more job losses, particularly in low-skilled industries. It could also widen the wealth gap between those who can benefit from the tech boom and those who are left behind.
But for now, Tengler remains optimistic about the future of the US economy. She’s bullish on the tech industry and believes that it will help keep the stock market afloat. Whether that prediction comes to pass remains to be seen, but the rise of AI and the tech boom is certainly worth keeping an eye on.