Could the US enter a recession? What do the experts say?

The current economic scenario of United States has led some experts to consider the possibility of a recession in the country. Among the internal and external reasons, factors such as a pandemic, war, inflation and commodity rally are cited.

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Credit Suisse said in May that the chance of a recession for Americans in the second half of 2023 is “very high”. The bank also cited the drop in corporate earnings forecasts due to the worsening economic outlook.

In the midst of this scenario, US Treasury Secretary Janet Yellen adopts a calming stance. On the other hand, former Treasury Secretary Larry Summers, chef saying that “there is certainly a risk of recession next year”.

Who tried to fight with all weapons to support the economy during the pandemic was the Federal Reserve (Fed). The US Federal Reserve held interest rates low and bought $120 billion in bonds monthly.

What do the experts say?

“Interest and unemployment rates are very low and readjusting interest rates will not heat up the economy so quickly. Therefore, we must have two or three difficult years ahead. Now, if this will turn into a recession, only time will tell”, says Beto Assad, equity analyst and financial advisor for the Kinvo app.

Researcher Livio Ribeiro, from the Brazilian Institute of Economics at Fundação Getulio Vargas (FGV IBRE), reminds us that economic slowdown is not the same as recession. needs to be smaller. But that doesn’t mean an economic contraction, that would be a recession,” he says.

The signs that she is really coming are many. They experience high unemployment and lower job openings, but are also seen through indices such as consumer confidence, which dropped to a low of 50.2 in June.

Added to this is the risk aversion of investors and the rise in prices. To avoid rising inflation, the Fed began raising interest rates.

“It is very easy for us to say that they were wrong after it has already happened. But, yes, the Fed should have changed interest rates before, because the result of these readjustments takes time to happen”, evaluates Assad.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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