Bank of America forecasts a US 'mild recession' for the next 9 months
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The bank CEO expects the United States will enter a mild recession in the second half of 2023 and first quarter of 2024.
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A Bank of America sign is shown on a building in downtown Los Angeles, California January 15, 2014 (Reuters)
The United States might fall into a mild recession in the second half of 2023 and the first quarter of 2024, Bank of America CEO Brian Moynihan said in an interview on CBS News channel on Sunday.
"So the last time I was here was the end of last year and we predicted a recession this year. We moved it out. It's basically third quarter this year, fourth quarter, this year into first quarter, a mild recession. And unemployment gets up in high 4% range, still very low by historical norms," he said.
In May, Federal Reserve Chairman Jerome Powell said that the US may be heading toward what he hopes is a mild recession.
Read more: US deep in debt, owing banks $1 trillion in credit cards
Last month, the chief of the Federal Reserve Jerome Powell stated that the US could be on the path to reach what he hopes to be a mild recession.
Policymakers at the central bank said in a March report that taking into consideration “the potential economic effects of the recent banking-sector developments,” the current “projection at the time of the March meeting included a mild recession starting later this year."
100 percent recession
In January, executives from JPMorgan Chase, Bank of America, and Citigroup released projected a "mild recession" this year, alongside predictions of an incline in unemployment rates of 4.9%, 5.5% and 5%, respectively.
Moynihan stated that "a rapid rise" in unemployment is due to kick off this year, despite acknowledging that this outlook is "much more conservative than the economic estimates that are out there."
In October 2022, a new Bloomberg Economics model projected that in the next 12 months, a recession in the United States is effectively certain.
The report forecasted that there is an increased probability of recession over all timeframes, during which it will hit a downturn reaching 100% in October 2023 compared to 65% within a comparable period during the 12-month estimate.
