Wall Street forecasts entering year-end recession, adjusting to early next year
“It is difficult to predict the timing of interest rate hikes due to the time lag.”
[뉴욕=AP/뉴시스] The forecast that the US would enter a recession at the end of this year was the main one a few months ago, but recently, the opinion that the entry time is expected to be early next year is increasing, CNN Business reported on the 2nd (local time). The photo is a view of New York, USA.
[서울=뉴시스] Reporter Yujabi = The forecast that the United States will enter the recession at the end of this year was the main one a few months ago, but recently, the opinion that the entry time is expected to be early next year is increasing, CNN Business reported on the 2nd (local time).
According to the report, Brian Moynihan, CEO of Bank of America, predicted in an interview on the 27th of last month that the US economy could fall into a recession early next year, contrary to expectations.
Earlier last month, he predicted that the US economy would fall into a mild recession in the second half of this year and the first quarter of next year.
Vanguard’s economists said the US recession was highly likely, but “probably postponed from this year to next year.”
JP Morgan economists also said last week that “a global recession could happen at the same time sometime next year.”
The possibility of a recession in the US has been constantly raised. Last year, investors and economists predicted that the US could enter a recession earlier this year as the Fed raised rates aggressively to counter inflation.
But with the US economy showing more resilience than expected and avoiding a recession so far, the chances of a recession are fading this year.
Part of the reason it’s hard to know when to enter a recession is because there’s a lag before a Fed rate hike will have an impact on the economy.
Fed Chairman Jerome Powell told Congress earlier this month that the Fed’s rate hikes “will take a year” to have any effect on the economy. Since it has been more than a year since the Fed started the interest rate hike cycle, it is also interpreted as meaning that, in theory, the impact of a rate hike could be in full swing, according to CNN Business.
“If the US economy stays strong, a recession may not happen,” said David Gregeck, director of investment strategy at asset management firm Aspirient. “But we’re still far from that situation at this point.”
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