Link Securities| In the latest quarterly survey conducted by The Wall Street Journal, economists indicated that, although inflation has started to decline, they still expect high interest rates to push the US economy into recession in 2023. On average, business and academic economists put the probability of a recession in the next 12 months at 61%, down slightly from 63% in the October survey. Both percentages are historically high outside of current recessions.
The Federal Reserve (Fed) had initially hoped to achieve lower inflation with a slowdown in economic growth, known as a “soft landing” rather than a contraction of the economy. However, 75% of respondents said the Fed will not achieve a soft landing for the economy this year.