Gas prices are coming down and inflation is easing up, yet a probability model suggests an American recession is 56 percent likely to happen by September 2024.
The federal government defines an economic recession as at least two consecutive quarters of negative GDP growth.
However, the Fed and Bank of America economists, as reported by USA Today, agree that a prolonged recession is not ahead for the United States.
But, smooth sailing is not yet ahead. Americans may have been tricked into a false sense of economic security as 2024 approaches, according to Richard Saperstein, Treasury Partners’ chief investment officer.
“There are elevated expectations for a bullish slowdown where the economy slows enough to bring down inflation but not enough to trigger a recession,” he said. “Stocks are facing headwinds from higher interest rates and the uncertainty of how higher rates will affect economic growth and earnings.”
If the economy continues to add jobs, then GDP growth is likely to enter negative territory, experts said. The Fed expects 1.5 percent GDP growth in 2024, and inflation will likely remain above 2 percent.
Interest rates remain historically high as consumers prepare to shop for Christmas 2023. Economists predict fallout to reach the economy and intensify next year. The Federal Reserve also expects its policy tightening to weigh on the economy, but does not foresee a recession. The nation’s growth rate is expected…
