The U.S. economy is facing more downside risks in the coming months, according to top business economists.
Federal Reserve Chair Jerome Powell has come under intense scrutiny for mistakenly identifying inflation as "transitory" before eventually admitting that policymakers got it wrong back in December and reiterating as much at the January meeting press conference. "We do realize that the timing and pace of that are, are highly uncertain and that inflation has persisted longer than we—than we thought.
Firms including Goldman Sachs and Bank of America are forecasting that the Fed could hike rates between seven and nine times this year, however, the escalating conflict between Russia and Ukraine may throw a wrench into that plan. Ukrainian servicemen sit atop armored personnel carriers driving on a road in the Donetsk region, eastern Ukraine"At the same time, the Russia/Ukraine crisis could force a reassessment of the Fed tightening path resulting in central banks turning less hawkish, while policymakers may consider additional fiscal stimulus," JPMorgan Chase strategist Dubravko Lakos-Bujas wrote in a note to clients.
On the jobs front, the group is a bit more optimistic about the recovery, seeing modest job creation, rising pay, and falling unemployment. Unemployment rate falls to 3.5% by 3Q 2022-holding through 4Q 2023The February 2022 NABE Outlook presents the consensus macroeconomic forecast of a panel of 57 professional forecasters, The survey, covering the outlook for 2022 and 2023, was conducted February 7-15, 2022, before Russia's invasion of Ukraine.
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