Deutsche Bank is one of the first major banks to forecast a US recession. Goldman Sachs Group Inc. economists led by Jan Hatzius said in a report on Monday that an economic downturn was “far from inevitable,” in part because consumers and companies are “flush” with cash.
The US will tumble into a recession next year as the Federal Reserve jacks up interest rates to combat high and widening inflation, Deutsche Bank economists David Folkerts-Landau and Peter Hooper said in a report on Tuesday.
They see the Fed raising rates by 50 basis points at each of its next three meetings on its way to a peak above 3.5% by the middle of next year. The Fed’s current target for the federal funds rate is 0.25% to 0.5%, after it lifted off levels near zero last month.
