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BofA economists expect recession in first quarter of 2023 (iStock)
According to the forecasts of Bank of America (BofA) economists, a recession may come in the first quarter of 2023.
“Given the range of risks we face as the payback continues and a recession looms, we think the market could drop as low as 3,000 based on a range of indicators,” Savita Subramanian, BofA head of U.S. equity strategy, said in a statement.
There is no official definition of a recession, but many economists describe it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a decline already seen in 2022.
Many Americans also believe that the United States is already in a recession. More than half, or 56%, of Americans believe the country is in recession, according to a recent poll by YouGovAmerica and The Economist.
If you are facing a high-interest loan, you can consider paying it with a consumer loan at a lower rate. You can visit Credible to speak with a personal loan professional to see if this option is right for you.
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Interest rates expected to continue to rise in 2023
Adding to recession fears, Americans could be affected by rising interest rates in 2023.
The Federal Reserve has increased interest rates six times so far in 2022 to combat high inflation. Finally, the Fed increased its benchmark rate by 75 basis points for the fourth month in a row in November.
The rate hike pushed the reference federal funds rate to the range of 3.75% to 4%, or the highest rate since the 2008 global financial crisis.
Even with smaller rate hikes in 2023, any increase in the federal funds rate could affect interest rates on financial products like credit cards.
If you’re struggling in the current economy, you may want to consider taking out a personal loan to pay off high-interest debt, such as credit cards, at a lower interest rate. You can visit Credible to compare multiple lenders at once without affecting your credit score.
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Inflation may still be a problem in 2023
In the midst of a potential recession, Americans may not see the end of higher-than-normal prices for essential goods and services in 2023. In fact, the Mortgage Bankers Association (MBA) believes that inflation will not reach target levels until 2024. .
“We won’t be on the Fed’s inflation target until 2024,” said Mike Fratantoni, the MBA’s chief economist and senior vice president, at the Market Outlook session at the 2022 MBA Annual conference in Nashville.
The Consumer Price Index (CPI) increased by 7.7% yoy in October. This marks a smaller increase than the 8.2% year-on-year increase in September. However, the inflation rate remains close to 9.1%, the 40-year high earlier this year.
More than half, or 78%, of Americans believe inflation is a crisis, according to an October study by real estate data firm Clever.
If you’re struggling to manage your finances in today’s economy, consider paying off high-interest debt with a lower-interest personal loan and potentially lowering your monthly payments. You can visit Credible to compare individual loan rates from multiple lenders at the same time and find the rate that suits you best.
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