J.P.Morgan economists predict a “mild recession” in the United States in the back half of next year given expectations for the Federal Reserve to tighten monetary policy further in its battle against inflation.
The investment bank sees the economy contracting by 0.5 percent by the fourth quarter of next year, and possibly dragging into 2024. That is seen cutting 2023 U.S. gross domestic product (GDP) to 1 percent, almost half of its forecast for 2022.
JPM expects another 100 basis points (bps) worth of hikes from the Fed through March 2023, after hiking by more than 300 bps so far this year. A 50-bps hike is expected in December, followed by 25 bps each in February and March….