What the next economic recession may look like? – By Megan Henney (FOX Business) / June 5, 2022
A recession might be coming – here’s what it could look like
Recessions are notoriously hard to predict, but consensus is growing among big banks and prominent economists that a downturn is coming as the Federal Reserve amps up its war on inflation.
The Fed is hoping to achieve the rarest of economic feats as it moves into full inflation-fighting mode: cooling consumer demand enough so that prices stop rising, without crushing it so much that it throws the country into a recession. Although Fed policymakers are counting on finding that elusive sweet spot — known as a soft landing — history shows that the U.S. central bank often struggles to successfully thread the needle between tightening policy and preserving economic growth.
Bank of America, Deutsche Bank, Wells Fargo and Goldman Sachs are among the most notable firms forecasting the possibility of a recession within the next two years, as the U.S. central bank moves to aggressively tighten monetary policy in order to cool consumer demand and bring inflation back down to its 2% target.
While the economy remains fairly strong at the moment, there are growing signs that Wall Street may be right: Economic growth in the U.S. is already slowing, the Bureau of Labor Statistics reported earlier this month that gross domestic product unexpectedly shrank in the first quarter of the year, marking the worst performance since the spring of 2020, when the economy was still deep in the throes of the COVID-induced recession.
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