Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
Recession Fears Ease as JPMorgan Chase Economists Update Forecast
JPMorgan Chase economists have revised their recession call, aligning with a growing sentiment on Wall Street that a contraction may not be inevitable anymore.
Although risks remain high and economic growth is expected to be slow, the bank’s forecasters believe there is a possibility of a soft landing based on recent data. This is surprising considering the interest rate hikes implemented to slow down the economy and other challenges.
Michael Feroli, the chief economist at JPMorgan Chase, stated that the current data suggests a growth of around 2.5% in the third quarter, significantly higher than their previous forecast of 0.5% expansion.
“Given this growth, we don’t expect the economy to lose enough momentum to slip into a mild contraction as early as next quarter, as we previously projected,” Feroli wrote.
Feroli pointed out positive factors such as the resolution of the debt ceiling issue and the containment of a banking crisis as reasons for the revised forecast. He also mentioned productivity gains due to the wider implementation of artificial intelligence and an improved labor supply.
Concerns about Interest Rates
However, Feroli emphasized that risks still exist. He specifically referred to the danger posed by the Federal Reserve’s interest rate policy, which has seen 11 rate hikes since March 2022. Despite these increases totaling 5.25 percentage points, inflation remains above the central bank’s target of 2%.
“While a recession is no longer our most likely scenario, the risk of a downturn is still significant. One way this risk could materialize is if the Fed continues to raise rates. Another possibility is if the effects of the tightening measures already implemented start to kick in,” Feroli explained.
Feroli does not expect the Fed to begin cutting rates until the third quarter of 2024. However, current market pricing suggests that the first rate cut could occur as early as March 2024, according to CME Group data. Market pricing also indicates a high likelihood of a recession.
Shifting Sentiment
The outlook on the economy has changed among Wall Street analysts. Bank of America recently abandoned its recession forecast, citing “recent incoming data” as the reason for reassessment. The firm now predicts growth of 2% this year, followed by 0.7% in 2024 and 1.8% in 2025.
Goldman Sachs has also lowered its probability of a recession to 20% from 25%.
In June, the Federal Reserve’s GDP projections indicated annual growth levels of around 1%, 1.1%, and 1.8%. Chairman Jerome Powell stated that the Fed’s economists no longer anticipate a credit contraction leading to a mild recession this year.
—’s Michael Bloom contributed.
