Posted on 06/23/2022 4:23:18 AM PDT by EBH
Bank of America has sounded the alarm on the US economy, predicting growth will stall next year and that the likelihood of a recession will surge.
In a note published on Friday — two days after the Federal Reserve hiked interest rates by 75 basis points — analysts said the Fed was too slow to aggressively tackle inflation, which is running at a 40-year high, and abruptly scrambling to get on top of it.
Now the bank sees GDP growth slowing to nearly zero by the second half of 2023 because of the influence of tighter financial conditions. While the risk of recession this year is low, Bank of America sees a 40% probability starting next year. And 2024 isn't looking much better, as analysts see only "a modest rebound" by then.
"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," the note said.
Despite the Fed's more hawkish stance, the bank doesn't see inflation cooling enough to get down to the central bank's 2% target. Instead, it will persist around 3%, it said. While supply problems and demand for goods will ease, inflation expectations are anchoring at higher levels and wage pressures will likely be tough to reverse.
(Excerpt) Read more at finance.yahoo.com ...
I tend to agree with you on that as well. The causes of inflation are unlike those we've faced in the past so historical methods of combating it, interest rate increases, may not be effective. One tool used to combat past recessions is to decrease employment, but we're in an abnormally tight job market currently. In many ways the Fed is winging it so add in a learning curve and a longer recession makes sense. Depth remains to be seen but I would think it would be deep rather than shallow.
I hope we’re both wrong, but I don’t think we are.
Time will tell but like you I'm not optimistic.
I think it will be sooner then that
They’re a year off. We are in recession now.
They aren't going to admit it until the Republicans take the house and senate so that they'll be able to blame them.
They will be late by 1/2 year or more.
Politically made, politically manipulated.
However, I think they shot themselves in the foot.
#29 The FED has stated another rate increase in July.
It may be .50 but could be .75 now like the June rate increase.
With elections coming I do not think the democrats want another.
Exactamundo!
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