The US economy could take a setback. Data from a Wall Street Journal poll reveals that financial experts expect the country to face an economic recession this year.
More than two-thirds of economists at 23 large financial institutions that do business with the Federal Reserve believe that The United States will experience a “shallow” or “mild” recession in 2023. Two of the surveyed institutions predict a recession for the following year.
The investigation included big names in the financial services industry, including Barclays PLC, Bank of America Corp, TD Securities and UBS Group AG.
collectively the Federal Reserve was named as the main reason for the recession due to its rate hike to fight inflation and reach its target. At the time of writing these lines, the inflation rate in the US stands at 7%, compared to the rate desired by the Federal Reserve of 2%.
Other factors in a looming recession include the spending of pandemic savings, the declining housing market and the increased rigidity of banks when it comes to granting loans.
The survey also revealed that many economists expect unemployment in the country to rise from 3.7% in November 2022 to more than 5%, along with a general economic contraction.
However, Credit Suisse Group AG, Goldman Sachs Group Inc, HSBC Holdings PLC, JPMorgan Chase & Co. and Morgan Stanley offered a more optimistic view of the situation, stating that a recession will be avoided in both 2023 and 2024.
Usually, the state of the US and world economy has not had the best predictions for the coming years. In October, Elon Musk said that the global recession could last until the end of the year, around 2024.
Recurring global problems explain these gloomy prospects, such as widespread energy shortages and inflation.
Some experts in the decentralized finance space have spoken out publicly about cryptocurrencies, particularly Bitcoin (BTC), as a hedge against monetary inflation.
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