Major banks project high possibility of economic recession in US in 2023

A possible economic recession is projected to hit the United States in 2023, said major banks and financial experts, as the Federal Reserve is expected to further increase interest rates to curb the high inflation.

The U.S. saw its consumer prices rose at an annual rate of 6.5 percent in December, marking the sixth straight month that the pace had slowed, but still failed to meet the Fed’s goal for an inflation rate of 2 percent.

Jerome Powell, chair of the Fed, said last month at a news conference that the Fed would maintain the tight monetary policy to bring the inflation back to its target.

JPMorgan Chase, Bank of America and other top U.S. banks recently estimated a possible recession in 2023, as the shadow of high interest rates lingers.

JPMorgan prepared a 1.4-billion-dollar net reserve increase for soured loans, which was driven by its macroeconomic outlook that showed a mild recession, said JPM’s CEO Jamie Dimon.

Bank of America also projected a same “mild recession” and built up its net reserves in the forth quarter.

The escalating inflation is adding downward pressure to the U.S. economy, also choking the Americans on higher-than-usual costs of livings and lower employment.

According to the 2023 Edelman Trust Barometer, only 36 percent of Americans surveyed are confident their families would be better off economically in five years.

The confidence level declined from roughly 40 percent in the previous year and marked an all-time low for the survey, which has been conducted annually for over two decades.

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