In a memo, Bank of America economists announced that they had previously withdrawn their forecasts for a mild recession in the US economy in 2024.
Bank of America economists canceled their recession projections in the US, becoming the first Wall Street bank to reverse its recession forecast with growing optimism about the economic outlook.
The change comes just a week after Fed Chairman Jerome Powell told reporters that Federal Reserve economists no longer predict a recession.
In announcing their new forecasts, BofA economists led by Michael Gapen cited better economic data from the past three months, with low unemployment and decreasing price pressures as the main reasons for the change in their forecasts.
“Recent data has made us reassess our previous view that a mild recession in 2024 is the most likely outcome for the U.S. economy,” the economists wrote in the briefing. Growth in economic activity averaged 2.3 percent over the last three quarters, with unemployment remaining close to all-time lows. In addition, wage and price pressures are moving in the right direction, albeit gradually.”
BofA economists predicted that the US growth will be 2 percent at the end of the last quarter, this figure will be 0.7 percent for 2024 and 1.8 percent for 2025.
The resilience of the US economy this year has forced many Wall Street experts to revisit their forecasts for when the country will enter recession, despite the most aggressive Fed tightening cycle in decades.
In addition, data pointing to a slowdown in inflation and staying power in hiring are causing forecasting economists to completely reevaluate calls for recession.