Deutsche Bank was the first to call a recession — but it won't be the last — via financialpost
Economists at Deutsche Bank split from the pack last week when they called a U.S. recession, but they figured they wouldn’t be lonely for long.
“‘Inflation shock’ worsening, ‘rates shock’ just beginning, ‘recession shock’ coming,” BofA chief investment strategist Michael Hartnett said in a note to clients. It expects in response, the Fed will raise rates by 50 basis points at each of the next three meetings in May, June and July, followed by 25 bp rises at the remaining meetings, putting the rate at 2.6% by year end. More hikes next year will bring the rate to 3.6% by June 2023. That along with quantitative tightening will amount to more than four percentage points of monetary tightening, it said.
Deutsche expects the U.S. economy to decelerate sharply in the second half of 2023 as “Fed tightening begins to bite more forcefully,” with negative quarters in the fourth quarter and the first quarter of 2024. A recession is defined by two consecutive quarters of contraction.
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