Connect with us

Hi, what are you looking for?


The ‘Most Predicted Recession’ Might Not Materialize After All

SSI program
SSI Program Recipients to Receive Dual Payments in September: up to $914 on Sept 1 and a replacement for October's payment on Sept 29, accommodating weekend scheduling. (PHOTO: The US Sun)

Bank of America US Economist Michael Gapen said on Tuesday that “we have revised higher our outlook for growth in economic activity this year and next, and no longer expect the economy to fall into a mild recession.”

Soft Landing

According to Bank of America, the Fed’s interest rate rise will result in a “soft landing,” in which growth will slow but still be positive in 2024. The Bank of America analysts have changed their forecast from a little recession in 2024 to no recession at all, reflecting greater confidence in the health of the US economy.

Jerome Powell, the chair of the Fed, stated this week that the central bank’s staff no longer expects a recession in 2023. Recently, Goldman Sachs reduced its probabilities of a recession in the coming year from 25% to 20%. Gapen’s prediction was supported by Jan Hatzius, the company’s chief economist, who believes that the US economy would have “unspectacular growth” in the coming years. Even large companies like Caterpillar (CAT) claim that commercial activity is developing more favorably than previously anticipated.

Additionally, signs that are looking ahead to the coming quarter are rising. On Tuesday, the GPDNow forecaster, which follows the US gross domestic product, raised its prediction for the third quarter of 2023. The third quarter is now expected to see an acceleration in economic growth to 3.9%, which would be the metric’s highest quarterly performance since the fourth quarter of 2021.

“The Recession Everyone Was Expecting”


Source- GoBankingRates

Invesco Global Markets Strategist Brian Levitt stated on Yahoo Finance Live in early July that the US economy was heading towards “the most anticipated recession you could imagine,” reiterating the widespread belief on Wall Street that the Fed’s cycle of interest rate hikes will come to an end with a recession.

However, the economy is displaying greater resilience than anticipated as the Fed recently boosted interest rates to their highest levels since 2001. The favorite inflation indicator of the Fed has just dropped to its lowest point in over two years. In contrast, according to statistics from the Bureau of Labor Statistics, wage growth rose at its weakest rate since the fourth quarter of 2021 in the three months from April to June.

And on Wednesday, the ADP Employment Report revealed that the US gained 324,000 private payroll jobs in July, much above the average estimate of 190,000 increases provided by Bloomberg.

However, there are two inflation reports between now and the Fed’s next meeting in September, and greater advancement on the inflation front might encourage the Fed to delay another rate rise until November or perhaps refrain from doing so altogether.

However, for the time being, BofA’s perspective is more in line with how the Fed anticipates the conclusion of its cycle of rate hikes.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Texas man Eduardo Arevalo confessed of strangling his pregnant sister for being an “embarrassment” to the family in 2019. Texas Man’s 8 Months Pregnant...


Even though the last wave of the federal government stimulus checks was distributed over two years ago, at least three distinct states are still...


The US is expected to distribute further stimulus funds through a variety of initiatives. Direct cash, tax refund, or some other kind of assistance...


Cameron Wright, a 22-year-old was sentenced with 55 years in prison for killing, dismembering and throwing girlfriend’s body at separate locations according to his...