The US economy is likely to face a “mild recession” towards the end of 2022 as the Federal Reserve continues to aggressively raise interest rates, according to Nomura.
“Financial conditions are set to tighten further, consumers are experiencing a significant shock of negative sentiment, energy and food supply problems have worsened and the outlook for external growth has deteriorated,” commented economists at Nomura Aichi Amemiya and Robert Dent. , in a note published this Monday, 20.
“With growth momentum slowing rapidly and the Fed committed to restoring price stability, we believe that a mild recession starting in the fourth quarter is now more likely than not,” they added.
Last week, the Fed announced the biggest rate hike since 1994, at 75 basis points, and projections show rates will continue to rise into next year. On Saturday, the 18th, Fed director Christopher Waller said he supported a new high of 75 basis points in July.
Already on Sunday, 19, US Treasury Secretary Janet Yellen admitted that a recession in the US economy is not inevitable.
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