The American economy could be in for a shock. According to data from a Wall Street Journal poll, financial experts believe the country will experience an economic downturn this year.

Over two-thirds of economists at the Federal Reserve’s 23 major financial institutions believe the United States will experience a “shallow” or “mild” recession in 2023. Two of the institutions polled anticipate a recession in the coming year.

The study included financial services industry heavyweights such as Barclays PLC, Bank of America Corp., TD Securities, and UBS Group AG.

The Federal Reserve was named as the primary cause of the recession because it raised interest rates to combat inflation and achieve its target.

The US inflation rate is 7%, compared to the Fed’s desired rate of 2%.

Pandemic savings being spent, a decline in the housing market, and banks having more stringent lending standards are all contributing factors to an impending recession.

According to the survey, many economists expect unemployment in the country to rise from 3.7% in November 2022 to more than 5%, along with general economic contraction.

Credit Suisse Group AG, Goldman Sachs Group Inc., HSBC Holdings PLC, JPMorgan Chase & Co., and Morgan Stanley, on the other hand, all predicted that a recession would be avoided in both 2023 and 2024.

The state of the United States and the global economy has not had the best predictions for the coming years. Elon Musk predicted in October that the global recession would last until the end of the year, around 2024.

These bleak forecasts are due to recurring global issues such as widespread energy shortages and inflation.

Some decentralized finance experts have publicly discussed the use of cryptocurrencies, particularly Bitcoin, as a hedge against monetary inflation.

(Adapted from LiveMint.com)

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