Financial institution of America chief govt Brian Moynihan has predicted america will enter a “very slight” recession later this yr regardless of bettering indicators for the worldwide economic system.
Talking at a enterprise summit in Sydney, Australia, Moynihan mentioned the US economic system is on observe for a gentle technical recession — outlined as two consecutive quarters of unfavorable progress — within the third quarter.
“Our base projection is for a recession to happen within the US economic system starting within the third quarter of 2023, happen by way of the fourth quarter of 2023 and into the primary quarter of 2024,” Moynihan mentioned throughout an look at The Monetary Evaluation’s Enterprise Summit on Tuesday.
Moynihan mentioned he anticipates the economic system to contract in every quarter by between 0.5 % and 1 %, leading to a “very slight recession within the scheme of issues,” and for rates of interest to start out falling within the second quarter of subsequent yr.
“I don’t assume you’ll see a deep recession,” he mentioned.
Moynihan mentioned the slowdown might be gentle sufficient that a “lot of persons are not going to see that a lot of” it.
“It will likely be extra of a technical recession than will probably be a deep drop within the US,” he mentioned.
Whereas many economists have warned for months that a international recession might be on the way in which, the Worldwide Financial Fund (IMF) in January raised its 2023 international progress from 2.7 % to 2.9 %, citing “surprisingly resilient” demand within the US and Europe, and the reopening of China’s economic system after strict lockdowns and border controls.
Final month, IMF Managing Director Kristalina Georgieva mentioned the US economic system seemed to be on observe for a “delicate touchdown” and would narrowly keep away from falling into recession this yr.
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