Major Bank Is First To Forecast A Recession—More Could Follow

Major Bank Is First To Forecast A Recession—More Could Follow

Share to Linkedin An increasing number of Wall Street experts are now forecasting a possible economic downturn on the horizon, with alarms growing louder after the widely-observed yield curve inverted last week and indicated a looming recession. Some experts are warning that the economy will take a "major hit" next year as the Fed struggles to ... [+] combat inflation. Deutsche Bank on Tuesday became the first major bank on Wall Street to forecast a recession next year, albeit a "moderate" one, thanks to the combination of surging inflation and rising interest rates. The firm's economists predict the U. S. economy will take a "major hit from the extra Federal Reserve tightening by late next year and early 2024," while also predicting "two negative quarters of growth and a more than 1. 5% rise in the U. S. unemployment rate." So long as Russia continues to pursue its invasion of Ukraine, which has caused severe market volatility since February, "recession and stagflation will be serious threats," says Moody's Analytics chief economist Mark Zandi, who adds that risks are "uncomfortably high." Goldman Sachs analysts similarly warned in a recent note that the period of stagflation that occurred in the 1970's is