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Economists noted the growing risk of a recession in the United States


April, 11 2022
watermark Economic news

Economists note that the risk of a recession in the United States is growing every day, as inflation in the country continues to accelerate. Moreover, it will lead to tougher measures on the part of the Federal Reserve System. Analysts predict that the US economy will enter a recession in the next 12 months.


Economists noted the same risks in August 2007 – which was really followed by a recession. 


Economists also worsened the forecast for the growth of the US economy this year. On average, they expect that GDP in the fourth quarter of 2022 will increase by 2.6% compared to last year. At the same time, the forecast was reduced by a percentage point compared to the consensus forecast six months earlier.


Today, the US Federal Reserve is trying to weaken the growth rate of the economy in order to slow down inflation. The inflation rate in February reached 7.5%. The Fed raised the base interest rate following the meeting on March 15-16 by 25 basis points, now the rate range is from 0.25% to 0.5% per annum. The rate was raised for the first time since 2018. 


The representatives of the regulator themselves expect that the Fed will raise the rate seven times this year. About 84% of economists surveyed expect a 0.5-point rate hike in early May. By the end of the year, the rate may reach 2.125%, and by December 2023 it will be 2.875%.


At the same time, economists predict the persistence of persistently high inflation, expecting an average of 7.5% in June 2022, and by December – at 5.5%.


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