Finance expert warns Americans of worst recession in 50 years — names safe assets to invest in

Things have been tough for the US economy in 2025, and while people enter the new year with hope, things don't seem to be getting any better in 2026. As one top economist has predicted that American citizens could go into the worst recession that the country has seen in the last 50 years. This will not be music to the ears of the Trump administration, which has come under heavy criticism thanks to its policies and is seemingly facing an uphill battle to perform well in the Midterm elections.

These claims were made by economist Komal Sri-Kumar, President of Sri-Kumar Global Strategies, as per a report in Finbold. In a discussion published on David Lin’s YouTube channel on December 19, he stated that the country will see stagflation levels not seen since the 1970s next year. This stagflation, as per Sri-Kumar, will be driven by rising inflation and recession, which could have a significant impact on America’s already-diminished employment rates.

The worst part is that no one is going to be safe. “We haven’t seen that since the 1970s. The reason we are repeating today is that stagflation requires a conscious mismanagement of policy for it to come into being. And all of the makings of stagflation are there today in a 2026 outlook….So, everybody’s going to get hit,” Sri-Kumar said. However, the silver lining in the cloud is that investing in certain groups of assets could work as an effective safety net.

The economist believes that precious metals will continue to surge, following the trend in 2025, so those two will be good investments at least for the short term. He even said that their prices could go up to $5,000 per ounce by the end of 2026. Sri-Kumar also put emphasis on investing in real estate, which everyone knows is getting more and more expensive.

“If you are in equities, you could get hit. If you’re in long-term bonds, you can get hit because the yield goes up. So, where do you go and hide? Some of your portfolio should be in alternative assets, perhaps real estate, distress debt. When there is blood on the street, you go and put some money into it,” he added.

Sri-Kumar believes that the rate of inflation will be more than 3% in 2026 and said that the President’s tariffs and weakening demand create an environment conducive to a recession. He has also predicted rising mortgage rates, which could further cut down consumer spending. The administration’s actions have not done a lot to instill confidence in the economy either.

The report states that the Fed has indicated a willingness to cut rates even with good employment numbers, as it doesn’t have confidence in the official employment data. Sri-Kumar believes that the government is acting on impulse rather than taking data into account, which is always a dangerous thing to do. He further believes that the fiscal policy may make things even worse. The current deficit, around 6.5% of the total GDP, along with tax cuts and spending increases, might worsen inflation.

More on Market Realist:

How Walmart is making sure your favorite holiday products don’t sell out is pure genius

Wall Street veteran defies concerns about AI bubble and has good news about US economy in 2026

Walmart shoppers have a major problem with steaks sold at discounted prices — here's why