Economists, who had previously predicted an economic recession in the United States, began to revise their forecasts, after inflation began to recede, and the economy continued to show signs of strength and resilience.
And Bloomberg agency quoted Peter Hooper, vice president of research at Deutsche Bank, and chief economist at Fannie Mae, Doug Duncan, as saying that it is now like throwing a coin in the air, which means that the chances of a recession are equal to the chances of avoiding it, but they indicated their belief that deflation may be more likely than others.
But Duncan noted that housing starts and prices, as well as auto sales numbers, were stronger than expected, which has supported the economy in recent weeks.
Hooper attributed the decline in the possibility of the economy entering a recession to the Federal Bank, and it raised interest rates slowly, which contributed to curbing inflation, without causing the economy to stop.
As for Aichi Amemiya, chief economist at Nomura Securities International, he made it clear that he still sticks to his company’s predictions that the world’s largest economy will enter a recession, and even claimed that a recession is close.
Bloomberg conducted a poll of economists this month, which showed that the probability of a recession in the United States during the next twelve months is 60%.
This result comes despite the growing optimism of some economists polled by Bloomberg with the decline in inflation.
The agency expected the personal consumption expenditures price index to rise by 2.2% in the fourth quarter of 2024, according to the latest survey, and expectations in last month’s survey were 2.3%.
The survey suggested that the so-called core personal consumption expenditures price index would decline during the first half of next year by more than was expected last month, and economists also expected the consumer price index to decline faster until the end of next year.
Bloomberg conducted the survey of 73 economists from July 14 to 19, after the latest consumer price index report showed that the inflation rate in the United States fell in June to its lowest level in more than two years.
This prompted many traders to bet that the expected rate hike next week by the Fed will be the last in this cycle. Economists in the poll also expected smaller rate cuts from the Fed next year.
In connection with the matter, Philip Marie, chief US strategist at Rabobank, said in an interview on Bloomberg TV, that he does not expect the Fed to raise interest rates again in November, because the economy will be in recession by then. He attributed this to the fact that real interest rates will become more restrictive, which will lead to a slowdown in the economy.
2023-07-21 16:13:17
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