International financier George Soros said here Monday that he expected a global recession in 2007 if the US housing market continues to cool after the Fed funds rate stops to rise.


According to a Channel NewsAsia report, Soros, who was visiting Singapore, predicted that the US Federal Reserve would raise the Fed funds rate by another 50 basis points before putting a stop to this round of rate hikes.

He added that the housing bubble in the US, where double-digit rise in house value is being recorded, has come to its maximum extent and is in the process of being deflated.

As the huge American consumption has been an irreplaceable engine of world economy, according to Soros, a global slowdown would be on the way if American consumers were forced to consume less by the bubble burst.

He said that a hard landing of the American economy will probably be associated with a decline in the US dollar, and European economies, which do not have the potential to counterbalance such a hard landing, will be hurt.

According to Soros, the large and growing current account deficit of the US is financed by Asian countries, especially China, which are buying the US Treasury bills and bonds.