According to reports, economists are growing concerned that the US economy may face a recession over the next 12 months.
According to the study, experts predict a 28 percent possibility that the United States would enter a recession by 2023, up from a 13 percent prediction in 2021. Economists have similarly lowered their forecasts for the United States. GDP growth is forecasted to be 2.6 percent in the fourth quarter of 2022, down a full percentage point from the previous six months.
On March 16, it was announced that inflation had risen faster than expected, prompting the Federal Reserve to commit to raise the federal funds rate by.25 percent to.50 percent in order to bring down skyrocketing costs. Approximately 84 percent of survey respondents expect the Fed to raise rates by.50 percent in early May, with more than 57 percent expecting at least two hikes until 2022.
Economists surveyed by The Wall Street Journal this month on average put the probability of the economy being in recession sometime in the next 12 months at 28%, up from 18% in January and just 13% a year ago.https://t.co/VTuYcB1SbL
— Catherine Rampell (@crampell) April 10, 2022
In August 2007, economists predicted a recession with a likelihood of 28 percent, months before the US economy hit one of its worst downturns in history.
Nevertheless, experts predict that inflation will continue high, peaking at 7.5 percent in June 2022 and falling to 5.5 percent by December. Experts predict that inflation will fall to 2.9 percent by 2023, which is close to the Federal Reserve’s chosen target rate of 2%.
“It’s politically unwinnable to be seen not battling.” However, the Fed’s sole policy reaction is to tighten. Actions by the Federal Reserve to control inflation will lead to a recession sooner rather than later, according to Amy Crew Cutts of AC Cutts & Associates LLC, who predicts a 70 percent possibility of a recession in the coming year.
