A major global bank that predicted the U.S. was heading for a recession has made an even bleaker forecast for the nation’s economic future.
Deutsche Bank said Friday that the recession it predicted is coming sooner and will hit harder, according to Business Insider.
“More than two months ago, we forecasted that the US economy would tip into a recession by end-2023,” Deutsche’s team, led by chief US economist Matthew Luzzetti, said in a note issued by the German bank.
“Since that time, the Fed has undertaken a more aggressive hiking path, financial conditions have tightened sharply, and economic data are beginning to show clear signs of slowing,” the note said, referring to the Federal Reserve’s action to increase interest rates, which was taken in an attempt to lower inflation.
REPORTER: “Economists are saying a recession is more likely than ever.”
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“In response to these developments, we now expect an earlier and somewhat more severe recession,” the note said.
The note predicted the unemployment rate will jump by almost two percentage points
The note predicted that the economy could shrink at an annualized rate of 3.1 percent in the third quarter of 2023, and then by 0.4 percent in the fourth quarter, Deutsche said. In the past, it had predicted the economy would start to shrink in the fourth quarter.
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