Fed will be forced to hike US economy into a recession in 2023 – Danske Bank

Despite the recession fears, the US economy performed relatively well over the summer. But in the view of economists at Danske Bank, the Federal Reserve continues to guide the US economy toward a recession.

Labour market shows few signs of cooling

“Despite falling into a technical recession during H1, the recent easing in gasoline prices will support positive real private consumption growth during H2.”

“Headline inflation has peaked, but labour market and underlying price pressures remain strong. Fed will be forced to hike US economy into a recession in 2023.” 

“We adjust the GDP forecasts to +1.6% in 2022 (from +2.4%) and -0.2% for 2023 (from +0.1%). The downward revision for 2022 largely reflects the weaker-than-expected growth during H1, but risks remain tilted to the downside for 2023.”

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