Folkerts-Landau and Hooper from Deutsche Bank yesterday:
…inflation in the U.S. and Europe has now reached a level that forces the Federal Reserve and
The European Central Bank sharply adjusted its monetary policy stance.As a result, we now
The U.S. economy is expected to slip into a complete recession by the end of next year, and EA
In a 2024 growth recession…
resource: D. Folkerts-Landau and P. Hooper, World Outlook 2022-24: On the Brink, Deutsche Bank, April 5, 2022.
This forecast is much more pessimistic than the December baseline, which predicts a recession in the fourth quarter of 2023:
resource: D. Folkerts-Landau and P. Hooper, World Outlook 2022-24: On the Brink, Deutsche Bank, April 5, 2022.
The forecast is also far less optimistic than the February consensus of a survey of professional forecasters. Of course, a lot has happened since the SPF forecast was collected (end of January).
figure 1: GDP (black), Atlanta Fed GDP nowcast (black+), Pro Forecaster Survey February average (red), and Deutsche Bank forecast (4/5), all in billions of dollars in 2012 SAAR. Recession dates as defined by NBER are shaded from peak to trough in gray. Source: BEA, Atlanta Fed, Philadelphia Fed, Deutsche Bank, NBER, and author’s calculations.
And the 10yr-3mo and 10yr-2yr metrics Recession highly likely by March 2023 is not recommended (The 10- to 2-year spread was positive yesterday) DB’s forecast for a recession in late 2023 is tied to levels more than a year later.
