US economy has 40% chance of recession

NEW YORK:

Bank of America (BofA) Securities economists see roughly a 40% chance of a US recession next year, with inflation remaining persistently high.

They expect US gross domestic product (GDP) growth to slow to almost zero by the second half of next year “as the lagged impact of tighter financial conditions cools the economy,” while they see just a modest rebound in growth in 2024, according to a research report on Friday.

“Our worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous game of catch up,” Ethan Harris, global economist at BofAS wrote, adding that the firm expects the Fed to hike interest rates to above 4%. They see the risk of a recession for this year as low.

Published in The Express Tribune, June 19^th, 2022.

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