The U.S. economy’s slide into recession over the next 12 months is a virtual certainty, according to the New York Post, citing Bloomberg Economics’ forecast model released on Monday. Many senior executives at Wall Street’s biggest banks share similar views, saying they are preparing for a possible recession.
The latest statistical projections from Bloomberg Economics showed a 100% chance of a recession over the next 12 months, compared to a 65% chance of a recession in the last previous Bloomberg model update.
The forecast gave the reasons for the recession, including the U.S. economy struggling with decades-high inflation, U.S. Federal Reserve interest rate hikes and growing geopolitical tensions.
Almost all CEOs are bracing for the U.S. economy to slide into a recession, according to FOX Business, citing a survey released Oct. 13 by the Conference Board.
The survey found that 98% of CEOs said they were preparing for a US recession in the next year or a year and a half. This figure is five percent higher than the third quarter survey.
About 81% of CEOs said economic conditions had deteriorated from six months ago, according to the Conference Board. Almost three-quarters were pessimistic about their expectations for the next six months, with 74% saying they thought conditions would get worse.
“We recognize that pressure points are developing in several areas of the economy that could lead to stress going forward,” US Bank CEO Andy Cecere said in an Associated Press report Oct. 14. Wells Fargo CEO Charlie Scharf told investors on a conference call that the bank expects broader economic conditions to weaken.
JPMorgan Chase CEO Jamie Dimon told The Associated Press that there is a “very, very serious” mix of concerns that could lead to a recession in the next six to nine months.
According to Steve Hanke, professor of applied economics at Johns Hopkins University, there is an 80% chance that the United States will enter a recession, which is much higher than expected. Hanke told CNBC’s “Street Signs Asia” on Sept. 23.
Hanke criticized the US Federal Reserve’s inability to manage inflation. “They’ve really been looking for inflation and the causes of inflation in the wrong places. They’re looking at everything under the sun except the money supply,” Hanke said.