Recession is almost a given, and Biden's team 'don't know what they are talking about' as they play down the risk, Santa Lucia investment chief says

Investors should brace themselves for an almost certain recession this year, according to the chief investment officer of Santa Lucia Asset Management.Alexander Spatari/Getty Images

• Americans should brace for an almost certain recession this year, according to the CIO of Santa Lucia Asset Management.

• "The Biden team needs to look at the numbers because they honestly don't know what they're talking about," James Morton told CNBC.

• White House officials recently suggested the economy is on a path of "stable" growth with no signs of an imminent recession.

Americans should brace themselves for the near certainty of a recession this year, but how severe it will be remains a matter of debate, according to the investment chief at Santa Lucia Asset Management.

James Morton rejected recent suggestions from the White House that the US economy is on a path of "steady and stable" growth with no indications of an imminent recession.

There is "close to 100% certainty there will be a recession in the US this year and it's just a question of when it's recognised and how deep it goes," the Singapore-based investor told CNBC's "Capital Connection" on Thursday.

"The Biden team needs to look at the numbers because they honestly don't know what they're talking about," he added.

White House press secretary Karine Jean-Pierre said at a January 24 press briefing that the US "economy is continuing to grow in a steady and stable manner." She said at a January 18 briefing that "the data points are showing that this is not what we see where the economy is currently to pre-recession or recession."

The US leading indicators index, a gauge of future economic activity, fell for the second straight month in December, according to data released this week, and that suggests an increasing likelihood of a recession, he added.

"Every single time since the 1950s there has been a recession, this is 100% certainty," Morton said. "And this might be different this time, of course, but it's highly unlikely."

Despite the recent waves of layoffs in the tech industry and an overall decline in labor force participation, America's unemployment rate still sits way below the 5% target at 3.5%. With the Federal Reserve slowing the pace of its interest-rate hikes to 50 basis points last month after four consecutive upticks of 75 basis points each, signs of cooling inflation have provided some support to economic confidence. 

Morton is focusing on the 2022 earnings announcements as they roll out to gauge how the year ahead will unfold.

"Because obviously markets look forward, and watch what has been accomplished last year — I think it's pretty much baked into the share prices. So will we get upbeat or downbeat guidance? I think that's going to be far more interesting."

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