Bank of America Securities economists think the probability of a US recession next year is about 40%, as inflation remains consistently high.
While they expect US gross domestic product (GDP) growth to slow to near zero in the second half of next year “as the lagged effect of tighter fiscal conditions cools the economy”, they see only a “modest” recovery in growth. 2024, according to a research report this Friday.
“Our biggest fears around the Fed have been confirmed: they’ve fallen far behind the curve and are now playing a dangerous compensation game,” wrote Ethan Harris, global economist at BofAS, adding that the company expects the Fed to raise interest rates. over 4%”.
They see the risk of recession as low this year.
The Fed on Wednesday approved the biggest rate hike in more than a quarter of a century to stem the rise in inflation. The measure increased the base rate by 0.75 percent to a range between 1.5 percent and 1.75 percent.
BofA economists also cut their global economic growth forecasts to 3.2%. They said they predict a 4.3% global growth for the year at the beginning of 2022.
They see more risk for growth in 2022 if strict Covid-19 quarantines continue in China. If the US economy goes into recession, there will also be risk to global activity in 2023.
source: Noticias
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