Recently, concerns have emerged about a potential recession looming over the United States economy. Economists are investigating the credibility of this looming threat and trying to predict when it might come to pass. While some more optimistic viewpoints suggest the recession might not hit until 2024, more critical perspectives warn that we could start feeling its impact as early as the end of this year.
According to economists Aichi Amemiya and Robert Dent from Nomura Holdings Inc., the signs point to a mild recession starting in the last quarter of 2022. They believe the slowing growth momentum and the Federal Reserve’s focus on stabilizing prices make this scenario increasingly likely. They also anticipate that due to ongoing high inflation throughout 2022, the Fed’s response to the economic downturn may be restrained.
Ongoing supply chain challenges, combined with escalating prices for essential goods like food, fuel, and housing, have led to a decrease in consumer confidence. This has prompted more people to save money rather than spend it, which in turn reduces the amount of money circulating within the US economy. Efforts to address this economic slowdown may face obstacles due to persistent high inflation concerns.
Treasury Secretary Janet Yellen shared a similar outlook, stating that elevated prices are expected to impact consumers well into the end of 2022. She also indicated that given the current trajectory, it could take several years for inflation to return to more desirable levels.
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