The probability of economic downturn in 2023 is very high despite the signs of easing inflation, experts warn
Higher interest rates will push the US economy into recession in the coming year, The Wall Street Journal reported on Sunday, citing its latest quarterly survey of economists.
According to the report, business and academic economists on average put the probability of a recession in the next 12 months at 61%. The forecast is slightly changed from 63% in October’s survey.
The WSJ report indicated that the Federal Reserve had initially hoped it could bring down inflation with only a slowing in economic growth rather than an outright contraction, an outcome dubbed a “soft landing.” However, three-quarters of respondents polled by the Journal said the Fed wouldn’t achieve a soft landing this year.
The warning comes despite a slightly more optimistic outlook on inflation. The report said that, as measured by the year-over-year change in the consumer-price index, inflation has eased from 9.1% last June to 6.5% in December. Economists expect it to fall to 3.1% by the end of this year and see it ending 2024 at 2.4%.
“While recent inflation prints have shown some progress, a few persistent categories like core services are associated with the historically tight labor market, suggesting that there is still ‘a long way to go’ for the Fed,” Deutsche Bank economists told the WSJ in the survey. “The Fed would stay on its tightening trajectory to restore the rebalance of labor market and price stability, which in our view would engineer a sharp rise in unemployment and recession,” they explained.
Meanwhile, chief economist at EY-Parthenon Greg Daco said that “[w]hile services activity remains robust, the housing sector is tumbling under the weight of elevated mortgage rates and manufacturing activity is stalling–both signaling a broader economic downturn is likely coming.” The expert expects the combination of persistent inflation, tighter financial conditions and weaker global growth will push the US economy into a mild recession in the first half of 2023.
Overall, economists said that a recession can’t be avoided but that they expect it to be relatively shallow and short-lived.
On average, they expect gross domestic product to expand at a 0.1% annual rate in the first quarter of this year and to contract at 0.4% in the second. They see no growth for the third quarter and a 0.6% growth rate for the fourth, according to the report.
https://www.rt.com/business/569931-rising-risks-us-recession/
US Army Secretary Dan Driscoll is preparing to leave the Trump administration after what a new report has described as months of tension with Secretary of War Pete Hegseth, potentially triggering another change at the army’s top echelons.
According to the Friday report by The Wall Street Journal, Driscoll is expected to step down before the end of the year and could leave his post earlier. The newspaper cited people familiar with discussions over his departure.
The Journal reported that Driscoll and his family vacated the official residence assigned to the army secretary at Joint Base Myer-Henderson Hall this summer, a move that could indicate he was preparing to leave the position.
The reported departure would come at a time of continuing uncertainty at the top echelons of the army.
Hegseth abruptly removed Army Chief of Staff Gen. Randy George in April, while Trump has not yet nominated a permanent successo....more below
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The Islamic Revolution Guards Corps (IRGC) warns the enemies that any act of aggression against the Islamic Republic will not go unanswered.
In a statement on Thursday, the IRGC issued a “stern warning” to the enemies after US forces launched strikes against the southern Iranian port city of Bandar Abbas.
Following the US military attack on a point on the outskirts of Bandar Abbas Airport with aerial projectiles, the IRGC carried out new strikes targeting the US air base from which the attack originated in the wee hours of Thursday, it added.
“This response is a serious warning to the enemy that they should know the act of aggression will not go unanswered,” the IRGC emphasized.
The elite military force warned of a “more decisive” response if the enemy repeated any act of aggression.
It also said the responsibility for the consequences of any IRGC response lies with the aggressor.
The statement comes after the IRGC Navy on Thursday forced an American tanker to turn back. The tanker ...
