Majority Of Big Banks Predict Significant Economic Downturn In 2023: POLL
Of 23 major financial institutions that work directly with the Federal Reserve, 16 anticipate a recession within the next 12 months, with two anticipating one the year after, according to a survey published by The Wall Street Journal Monday.
These institutions, which range from Bank of America to UBS, note that Americans are spending their savings, banks are heightening lending standards and the housing market is in a decline, all classic warning signs that a recession is impending, the WSJ reported. All of this is being exacerbated, the banks say, by the Fed’s historically aggressive pace of interest rate hikes, designed to blunt stubbornly persistent inflation.
The Fed hiked interest rates after several administration officials infamously described spiking inflation at the end of 2021 as “transitory,” shattering expectations of a relatively uneventful economic year in 2022, the WSJ reported. Economists polled by the WSJ expect that the unemployment rate — which has remained low at 3.7% despite high rates — will jump past 5% in 2023, potentially costing millions of jobs.
If the Fed cuts rates in the latter half of the year, the economy will be able to rebound and 2023 will see a “shallow” or “mild” recession, the respondents predicted, according to the WSJ.
Another key factor behind a possible recession is the $2.3 trillion Americans accumulated during a pandemic savings-spree — driven primarily by government stimulus packages and reduced economic activity — which has since fallen to just $1.2 trillion, and is likely to continue falling as consumers lean on their savings to drive spending, the WSJ reported. Once these savings run out, consumer spending is likely to decline “sharply,” senior U.S. economist at Deutsche Bank Brett Ryan told the WSJ.
Only five of the surveyed groups anticipated that there would be no recession either this year or the next: Credit Suisse, JPMorgan Chase, Morgan Stanley, Goldman Sachs and HSBC Holdings, the WSJ reported.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.
Of course we’ll have a recession and worse, no matter how much they continue to try and change the definition of a recession. It’s the government’s never ending money printing that is driving inflation and there’s no end in sight. That and Biden’s promise to end “fossil fuel” in America.
First, there’s the Democrats laughably called 740 billion dollar “Inflation Reduction Act” which is actually nothing but a “Green New Deal” slush fund with items such as 60 billion dollars for “environmental justice”. Then there’s (supported by McConnell and 12 other RINO’s) the just passed nearly 2 Trillion dollar Omnibus Spending Bill that increases funding for our now “woke” Military with no accountability for their disastrous withdrawal from Afghanistan. Of course, zero dollars for our completely open border that let’s in millions that will have to be supported by taxpayers. More unaccountable and never ending (100 billion so far) dollars to the corrupt Ukrainian regime for our proxy war against Russia that we didn’t want, didn’t vote on, and can’t win.
And no, the Feds won’t cut interest rates later in the year because it’s the only remedy for the out of control inflation. As interest and mortgage rates continue to rise, the housing market will collapse; along with all the supporting industries such as building materials and supplies, construction jobs, lumber, manufacturing household good and appliances, etc., etc.. The marginal improvements in employment we now have will disappear and American’s debt and bankruptcies (already at historic levels) will skyrocket.
Then perhaps, if it’s not too late, by 2024 impoverished Americans will be ready to vote these destructive progressive ideologues out of office.