Billionaire hedge fund manager Kyle Bass believes that the U.S. might need “a brief recession” in order to strengthen its economy over the long run. Speaking to Bloomberg, Bass said that the country has to make some “difficult choices,” which include restructuring global trade relationships and addressing the growing federal budget deficit. While these steps could lead to short-term economic pain, he views them as necessary for rebuilding the nation’s financial foundation.
He also said that if the U.S. and China keep raising tariffs on each other, China would likely take a bigger hit because the U.S. buys much more from China than China buys from the U.S. If the trade fight continues, Bass expects China’s currency to lose value, which would support his view that the current disruption could end up helping the U.S. economy in the long run.
Bass’ comments come as the market has been selling off due to President Trump’s new tariffs. So far this year, the S&P 500 (SPY) is down 11.67% and nearly 15.4% off its February 19 peak. The tech-heavy Nasdaq (QQQ) is down 16.16% year-to-date and nearly 19.3% below its previous high. Meanwhile, bond markets have reacted sharply, with the 30-year Treasury yield seeing its biggest three-day jump since the COVID-19 pandemic and the 10-year yield rising the most since mid-2022.
Is QQQ a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) based on 90 Buys, 12 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average QQQ price target of $530.85 per share implies 19% upside potential.
