Wells Fargo Investment Unit made assessments that put the debate on the timing of the recession in the US on the shelf. Institutional strategists said that as of the second half of the road, the USA entered recession.
Sameer Samana, Senior Global Market Strategist in the Investment Unit, said: “There is a technical side to the recession, and then there is the expected deterioration in consumption and employment. The technical part was the story of the first half. Employment and consumption will be experienced in the second half," he said.
According to the agency, the unemployment rate will be 4.3 percent at the end of this year and 5.2 percent at the end of 2023. Previous estimates were 4.4 and 3.8 percent, respectively. Samana said that inflation will rise to 8.8 percent annually in June, the Fed will be more aggressive in raising interest rates to rein in price increases, which will shock the labor market and investments.
Wells Fargo was one of the first institutions to say it was in a recession. The institution stated in its statement last month that it does not expect a recession until the end of the year. Some economists working in different departments of Wells Fargo do not expect a recession until at least mid-2023.
Many institutions, from Nomura to Guggenheimand, also expect a recession by the end of the year.
The US economy shrank 1.6 percent in the first quarter of the year. According to Atlanta Fed data, there will be a shrinkage at the same rate in the second quarter. If the economy shrinks in this period, the country's economy will enter a technical recession.
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