The future of the US economy is looking uncertain, with a large number of economists predicting a recession in 2023. According to a recent survey conducted by The Wall Street Journal, over two-thirds of the economists at 23 large financial institutions believe that the country will slip into a recession in 2023, with two others forecasting a downturn in 2024.
The economists surveyed pointed to several factors contributing to their gloomy assessment, including tightening lending standards, a decline in the housing market, and the fact that US households are rapidly going through their pandemic-era savings. However, the main cause of concern is the Federal Reserve’s aggressive interest-rate hikes, which are aimed at cooling down the economy to combat high inflation. Despite these measures, inflation has fallen slightly, but remains well above the central bank’s target of 2 percent.
The prospect of a recession is a worry for many people, as it can lead to widespread job losses, decreased consumer spending, and a decline in overall economic activity. The Federal Reserve’s interest-rate hikes, designed to curb inflation, may also have unintended consequences, such as making it more difficult for businesses and individuals to access credit and slowing economic growth.
It is important for policymakers to carefully consider the potential impact of their actions on the economy, and to take steps to mitigate the effects of a recession if one does occur. This may include measures to support small businesses, provide unemployment benefits to those who have lost their jobs, and boost consumer spending through tax credits and other incentives.