Wells Fargo Investment Institute is predicting a recession in the United States this year as a result of the Federal Reserve’s aggressive monetary tightening policy.
Wells Fargo is expecting a “global slowdown,” including a “moderate” recession in the United States this year, followed by a U.S.-led recovery in 2024, the firm’s 2023 Midyear Outlook report (pdf) said. The elevated interest rates and recession fears will “weigh” down on financial markets, it predicted.
“Of the last nine Federal Reserve tightening cycles, seven have resulted in recession. This current tightening cycle is the fastest and most aggressive since 1981 and makes it difficult to believe the U.S. economy can avoid a contraction when the dust eventually settles,” said Darrell Cronk, president of Wells Fargo Investment Institute….