Bank of America predicts that the U.S. will enter recession in this year’s forecast. According to the bank’s economists, “A variety of factors have combined to slow down economic momentum more quickly than we previously anticipated.”
According to Bank of America, economists expect the U.S. to enter recession this year. They explained in a Wednesday report that their previous baseline outlook for U.S. economic growth had been a recession. However, a variety of factors have combined to slow down economic momentum more quickly than we had previously anticipated.”
Now, we expect a mild recession in America’s economy this year.
They also considered inflation from energy and food prices, tighter financial conditions and higher mortgage rates. Bank of America predicted in June that the United States would experience a 40% recession in 2013.
Economists expect that the fourth quarter U.S. gross national product will fall 1.4% from a previous year, before rising 1% in 2023.
Deutsche Bank is another bank that has predicted a U.S. recession in the near future. It expects a recession for the U.S. economy next fiscal year. Nomura forecasts a short but severe recession that will last five quarters, starting in the final quarter.
Analysts at Bank of America noted that:
Our forecast places inflation in line with the Fed’s 2% mandate for 2024.
They think that the Federal Reserve will have to take drastic measures to control prices because of the highest inflation rate in 40 years. Last month, the Fed increased interest rates by 75bps. This was the largest move since 1994. Multiple Fed officials indicated that another rate increase of the same size is possible for July.
The U.S. Labor Department released Wednesday’s report showing that the consumer price indicator (CPI) rose 9.1% over a year ago, which is the largest annual gain since 1981.
