The aggressive rate at which the Bank of Canada and the U.S. Federal Reserve (Fed) have pursued tightening monetary policy has yet to be reflected throughout the North American economy, one economist is warning. 
While the Bank of Canada may have hit pause on rate hikes for now, south of the border the Fed is expected to stay the course. The speed and magnitude at which both central banks have pursued a two per cent target rate on inflation has been at the centre of recession calls among experts.
“We haven’t seen the full blunt of what these central banks have done,” David Rosenberg, president and chief economist and strategist at Rosenberg Research, said in an interview on Thursday.  
He pointed to the decay in both the manufacturing and the housing sectors as a leading cause for economic concern, while also warning of the impact higher interest rates will inevitably cause on a credit driven economy. 
“It’s just a matter of timing, but it (a recession) is starring us in the face,” he added. 
As for timing, Rosenberg is adamant that the economic fallout will come sooner rather than later.  
“Just know that it’s out there (the recession), and it’s not a 2024 or 2025 story, it’s going to happen this year,” he said. 
For investors looking to navigate this climate, Rosenberg advised staying on the sidelines of the equity markets until the economy is either 70 per cent through the recession, or, the Fed is 70 per cent into an easing interest rate cycle -- neither of which are on the horizon, he added. 
Despite the economic pain that recessions bring, Rosenberg pointed to the reality that the situation is temporary but also cyclical. 
“This is the part of business cycle were we see the movie rewind itself,” he said.