Analyst Predicts 3 Ways the US Economy Will Fall Into a Recession

Analyst Predicts 3 Ways the US Economy Will Fall Into a Recession

Analysts Make Dire Economic Predictions About What’s Coming Next

( – Canadian financial experts are warning it’s now more likely than not the US economy will be in a recession by next year. On July 11, Richard Kelly, head of global strategy at the investment bank TD Securities, said that the odds of a recession are now above 50%. Worst of all, there are three separate factors at work — and it’s going to be hard for the administration to dodge them all.

Firstly, Kelly warned, high gas prices will create drag on the whole economy. Gas prices hit from two directions; they increase the cost of goods and many services, by making them more expensive to deliver, and they also reduce how much disposable income people have to spend on those goods and services. Kelly believes the peak impact of high gas prices will come at the end of this year, and could be enough to trigger a recession.

A second risk is over-enthusiasm by the Federal Reserve. After years of low interest rates, the Fed is now starting to increase the cost of lending. Interest rates are still low, but they’re already up by 0.75% this year and a second, similar, rise is expected this month. That wouldn’t add up to a large rise, but it would be a fast one, and it could also slow growth enough to tip us into recession.

Finally, Kelly thinks a general economic slowdown is a possibility. The US economy has taken a beating since early 2020, thanks to the COVID pandemic and Russia’s invasion of Ukraine. Confidence is down; 85% of Americans now think the country is heading in the wrong direction, and that makes people less willing to spend money. A recession is now a very real risk, and the routes out of it are narrowing.

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