Bank of America Predicts US Recession This Year as Inflation Hits 40-Year High – Economics Bitcoin News

Bank of America predicts that this year’s recession will see the U.S. enter recession. “A number of forces have coincided to slow economic momentum more rapidly than we previously expected,” the bank’s economists said.

Bank of America Says The US Economy Is headed into Recession this Year

Bank of America’s economists now expect a recession in the U.S. this year. In a report published Wednesday, they explained: “Our previous baseline outlook for the U.S. economy featured a growth recession. But a number of forces have coincided to slow economic momentum more rapidly than we previously expected.” The analysts added:

The U.S. economy will experience a moderate recession this year, according to our forecast.

Factors such as higher interest rates and inflation caused by food and fuel prices were taken into account. Bank of America projected that there would be a 40% chance of the U.S. entering recession in June.

Economists expect that the U.S. Gross Domestic Product will fall 1.4% in fourth quarter compared to a year ago, and then increase 1% by 2023.

Deutsche Bank and other banks have also forecasted an immediate U.S. economic recession. Deutsche Bank expects that the U.S. will be in recession next year. Nomura forecasts a short but severe recession that will last five quarters, starting in the fourth quarter.

Analysts at Bank of America noted that:

Our forecast puts inflation broadly in line with the Fed’s 2% mandate by the end of 2024.

The Federal Reserve will have to take drastic measures to control prices, they believe. This is the highest inflation rate in 40 years. Last month’s Fed interest rate increase was 75 basis points, the largest since 1994. Numerous Fed officials signaled that another rate increase is possible for July.

Meanwhile, Wednesday’s report by the U.S. Labor Department showed that the Consumer Price Index (CPI), rose 9.1% from the previous year. This is the highest annual increase since 1981.

What do you think about the forecasts by Bank of America’s economists? Leave your comments below.

Kevin Helms

Kevin, a student of Austrian Economics and a Bitcoin evangelist since 2011, was one of the first to discover Bitcoin. He is interested in Bitcoin security and open-source software, network effects, and the intersection of cryptography and economics.