{"id":37489,"date":"2022-06-05T10:59:37","date_gmt":"2022-06-05T10:59:37","guid":{"rendered":"https:\/\/harchi90.com\/what-the-next-economic-recession-may-look-like\/"},"modified":"2022-06-05T10:59:37","modified_gmt":"2022-06-05T10:59:37","slug":"what-the-next-economic-recession-may-look-like","status":"publish","type":"post","link":"https:\/\/harchi90.com\/what-the-next-economic-recession-may-look-like\/","title":{"rendered":"What the next economic recession may look like?"},"content":{"rendered":"
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Strategic Wealth Partners President and CEO Mark Tepper and Kaltbaum Capital Management Gary Kaltbaum weigh in on the risk of recession and reacts to Elon Musk looking to cut 10% of Tesla’s workforce.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

Recessions are notoriously hard to predict, but consensus is growing among big banks and prominent economists that a downturn is coming as the Federal Reserve amps up its war on inflation. <\/p>\n

The Fed is hoping to achieve the rarest of economic feats as it moves into full inflation-fighting mode: cooling consumer demand enough so that prices stop rising, without crushing it so much that it throws the country into a recession. Although Fed policymakers are counting on finding that elusive sweet spot – known as a soft landing – history shows that the US central bank often struggles to successfully thread the needle between tightening policy and preserving economic growth. <\/p>\n

HOW THE FEDERAL RESERVE MISSED THE MARK ON SURGING INFLATION<\/u><\/strong><\/p>\n\n\n\n\n\n\n\n\n
Ticker<\/th>\nSecurity<\/th>\nLast<\/th>\nChange<\/th>\nChange%<\/th>\n<\/tr>\n<\/thead>\n
BAC<\/td>\nBANK OF AMERICA CORP.<\/td>\n36.19<\/td>\n-0.51<\/td>\n-1.39%<\/td>\n<\/tr>\n
DB<\/td>\nDEUTSCHE BANK AG<\/td>\n10.93<\/td>\n-0.12<\/td>\n-1.09%<\/td>\n<\/tr>\n
WFC<\/td>\nWELLS FARGO & CO.<\/td>\n44.82<\/td>\n-0.51<\/td>\n-1.13%<\/td>\n<\/tr>\n
GS<\/td>\nTHE GOLDMAN SACHS GROUP INC.<\/td>\n318.68<\/td>\n-5.57<\/td>\n-1.72%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Bank of America, Deutsche Bank, Wells Fargo and Goldman Sachs are among the most notable firms forecasting the possibility of a recession within the next two years, as the US central bank moves to aggressively tighten monetary policy in order to cool consumer demand and bring inflation back down to its 2% target.<\/p>\n

While the economy remains fairly strong at the moment, there are growing signs that Wall Street may be right: Economic growth in the US is already slowing, the Bureau of Labor Statistics reported earlier this month that gross domestic product unexpectedly shrank in the first quarter of the year, marking the worst performance since the spring of 2020, when the economy was still deep in the throes of the COVID-induced recession. <\/p>\n

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A pedestrian walks past a pre-owned car sales lot in Miami, Florida on January 12, 2022. <\/span> (Photo by CHANDAN KHANNA \/ AFP via Getty Images \/ Getty Images)<\/span><\/p>\n<\/div>\n<\/div>\n

Recessions are technically defined by two consecutive quarters of negative economic growth and are characterized by high unemployment, low or negative GDP growth, falling income, and slowing retail sales. But they vary widely in how they actually manifest, which is equally difficult to forecast.<\/p>\n

Recent research from Alan Blinder, a former Federal Reserve Board vice-chairman and a Princeton economist identified<\/u> 11 Fed tightening cycles since 1965, of which eight were followed by recessions. Most of the downturns were very mild: There were five instances in which GDP fell less than 1%, or there was no economic decline at all. <\/p>\n

WHAT IS A RECESSION, AND SHOULD AMERICANS BE WORRIED?<\/strong><\/p>\n

“So will we get stuck with a recession? Maybe,” Blinder wrote in a recent Wall Street Journal op-ed. “The odds were probably above 50% even before the [first quarter] GDP report. But it’s important to note that any recession shouldn’t be deep and long, in contrast with those of the 1970s and early 1980s. “<\/p>\n