February 4, 2023

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Economists still believe in a US recession

(ABM FN-Dow Jones) Despite cooling inflation in the US, economists expect a recession this year. This was revealed this weekend in the Wall Street Journal’s quarterly survey of economists.

The probability of a recession in the next 12 months is now estimated by those surveyed at 61 percent. It was 63 percent in October last year.

Among economists surveyed, 75 percent think the Federal Reserve will fail to ease the U.S. economy. Those surveyed expected a short, shallow recession.

Economists are more optimistic about the growth of inflation. This will decrease to 3.1 percent by the end of 2023. Three months ago, those surveyed expected 3.3 percent. According to the study, inflation in the United States will decrease to 2.4 percent in 2024.

Looking at the central bank’s interest rate policy, economists expect interest rates to rise to 5 percent, in line with the central bank’s own forecast.

While the Fed itself does not expect to cut rates again later this year, most economists in the survey think it will. The market also takes this into account.

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