Bank of America is expecting a recession to hit the U.S by the first quarter of 2023.
There is a major slowdown happening says CEO Brian Moynihan.
Economists are now expecting a volatile market to persist in 2023.
A recession may be coming in the first quarter of 2023, according to forecasts by Bank of America (BofA) economists.
“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.
There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.
But many Americans already believe the U.S. is already in a recession.
More than half or 56% of Americans believe the country is in a recession, according to a recent poll by YouGovAmerica and The Economist.
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Major Slowdown in Economy Points Towards a Recession
While retail payments surged 11% so far this year to nearly $4 trillion, that increase obscures a slowdown that began in recent weeks: November spending rose just 5%, Bank of America’s CEO Brian Moynihan said.
Even Wells Fargo CEO Charlie Scharf is saying, “there is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year.”
American consumers are tapping the brakes on spending as the Federal Reserve’s interest rate increases reverberate throughout the economy, according to the CEOs of two of the largest American banks.
After two years of pandemic-fueled, double-digit growth in Bank of America card volume, the rate of growth is slowing.
Still, the downturn isn’t being felt equally across all retail customers and businesses, Wells Fargo’s CEO said.
Both Wells Fargo and Bank of America CEOs expect a recession by Q1 of 2023 and expect some sort of light at the end of the tunnel by Q4.
The implications of a recession end up affecting majority of the U.S. economy as corporations and businesses struggle to yield market capital in slow-growth conditions.
Wages are affected, unemployment skyrockets, and the banks get left with massive debt when Americans can no longer afford to pay their credit card bills or mortgages.
Do you think we will officially enter a recession in the beginning of 2023?
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Source(s): FOX Business, CNBC.
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