Deutsche Bank Predicts Major US Recession Next Year

Deutsche Bank Predicts Major US Recession Next Year

Deutsche Bank’s economists have warned that the U.S. will suffer a major recession next year. However, several other major investment banks, including Goldman Sachs and JPMorgan, are less pessimistic about the future outlook for the U.S. economy. Major US Recession Incoming, According to Deutsche Bank’s Economists

Deutsche Bank has predicted a deeper downturn than its previous forecast for the U.S. economy in a report to clients, published Tuesday.

The bank’s economists, including David Folkerts-Landau, group chief economist and head of research, explained in the report why the coming recession will be worse than expected. They described: We will get a major recession, but our strongly held view is that the sooner and the more aggressively the Fed acts, the less longer-term damage to the economy there will be.

The report explains that it will take a long time before inflation falls back to the Fed’s goal of 2%. The authors warned that the central bank will likely engage in the most aggressive monetary tightening since the 1980s, which “will push the economy into a significant recession by late next year.”

The Deutsche Bank economists detailed: “We assume conservatively that a Fed funds rate moving well into the 5% to 6% range will be sufficient to do the job this time … This is partly because the monetary-tightening process will be bolstered by Fed balance-sheet reduction.”

Several other major investment banks, however, are less pessimistic than Deutsche Bank.

Goldman Sachs recently estimated there is a 35% chance of a recession in the next two years. While admitting that it will be very challenging to bring down high inflation, Goldman’s economists wrote in a report Friday: We do not need a recession but probably do need growth to slow to a somewhat below-potential pace, a path that raises recession risk.

Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a report on Monday: “Inflation should ease from current levels, and we do not expect a recession from rising interest rates.”

Jacob Manoukian, JPMorgan’s head of investment strategy in the U.S., said this month that a recession in the near term is possible but not probable. Meanwhile, Bank of America chief investment strategist Michael Hartnett warned earlier this month that a “recession shock” is coming. Tags in this story Bitcoin, Crypto, Cryptocurrency, Deutsche Bank, deutsche bank recession, us recession

Do you think a major recession is coming in the U.S.? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Former Chinese Central Bank Governor: US Dollar Will Remain Global Reserve Currency, Says It "Has Great Inertia" ECONOMICS | 16 hours ago Fed’s Bostic Cautious About Rate Hikes as President Biden Blames Higher Prices on Covid-19 and Putin ECONOMICS | Apr 20, 2022

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous article$19M Sales in Less Than Two Months: DecentWorld Metaverse Shares First Results Next articleNepal Shuts Down Crypto Websites, Apps — Warns About Engaging in Crypto Activities Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItNFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales

Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.FBI Issues Alert Concerning Malicious State-Sponsored North Korean Hackers Targeting Crypto Firms Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method Iran to Increase Penalties for Unauthorized Cryptocurrency Mining Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin