Powerful Bank Says A Deep “Recession” Is Coming – Prepare Now
(ConservativeInsider.org) – From COVID-19 delays to Russia’s war in Ukraine, there are a multitude of factors influencing the US economy and skyrocketing inflation. The Fed has been quickly increasing interest rates in an attempt to slow inflation, leaving some experts to wonder if a recession, or a contraction of economic activity, is coming in the next few months or years. One powerful bank thinks it will.
Major Bank Warns of Impending Recession
On Tuesday, April 26, economists at the Deutsche Bank predicted that there will be a significant recession — or decline in economic activity — next year as American spending slows down due to record-high inflation numbers. Right now, Americans’ money is not going nearly as far as it did a year ago, as gas, food, and energy prices are rising quickly.
According to Bloomberg, the bank’s chief economist David Folkerts-Landau believes unemployment will rise “several percentage points” as jobs are cut when spending slows. While this is a scary thought, even the Deutsche Bank experts acknowledge they tend to be more pessimistic than other major banks.
Predictions From Other Banks and Experts
It’s always important to take information in from multiple different sources. In contrast to the Deutsche Bank’s outlook, Goldman Sachs Group Inc. believes there is only a 20%-35% chance the economy will contract by the summer of 2024.
Fed Chair Jerome Powell is also optimistic his agency can help the economy cool off slowly and bring inflation down to 2% without hurting jobs. This would be done by shrinking its balance sheet and raising rates just a bit. However, the Deutsche bank believes the sooner the Fed hikes rates, the better off Americans — and the economy — will be.
How This Affects the Lives of Americans
Anyone shopping for a house recently has already seen the rapidly rising mortgage rates. Of course, anyone looking for food or to travel has noticed the higher prices at the store and pump as well. Without a doubt, Americans will have to be budget-conscious in the coming months and years as goods and services remain expensive. However, continuing to spend money when you’re able will keep jobs online and the economy relatively stable.
Hopefully, the Deutsche bank proves to be wrong in its depressing prediction. However, if they aren’t, studying how this inflation and potential recession came about can help keep it from happening again. Senator Tim Scott (R-SC) highlighted where he believes the problems stemmed:
The Biden administration produced the worst inflation in 40 years, the worst labor shortage in history, and the lowest consumer confidence since the Great Recession.
— Tim Scott (@SenatorTimScott) April 26, 2022
Perhaps having fresh lawmakers in Congress after the November elections will help move the nation in the right direction.
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