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Experts Anticipate Downturn Will Impact One-Third Of the Globe in the Present Year

Image Source: Thapana_Studio / Shutterstock

In spite of the earnest efforts of stakeholders and experts to uphold a positive outlook on the current economic situation, indications strongly suggest that a recession is imminent in the United States at some point within this year.

As per the notable financier Michael Burry, inflation within the US economy has reached its pinnacle and might not subside until direct intervention by the Fed, a move which is likely to happen only after the economy slides into a recession.

“Inflation has peaked. However, this is not the concluding apex of the current cycle. There is a strong possibility of witnessing a reduction in the consumer price index, conceivably to negative territory in the latter half of 2023, leading to the US entering recession territory by any definition,” tweeted Burry on Sunday. “The Fed will engage in rate cuts and the government will initiate stimulus programs, resulting in another surge in inflation. It is not a complex situation.”

Despite the growing challenge of sustaining optimism, a few experts are optomistic that the impending recession might not be as severe as initially projected.

“It’s not assured,” stated Bank of America’s Chief Economist Michael Gapen in an interview with CBS. “There’s a chance we could avoid it. However, the consensus among most individuals in my position is that 2023 may prove to be a challenging year for the US.”

“In this specific scenario, I believe the recession doesn’t have to be profound. Nor does it have to be prolonged,” he added. “Our focus should essentially be on stabilizing an economy that has shown immense resilience following the pandemic, albeit bringing about a surge in inflation.”

Picture Credit: Thapana_Studio / Shutterstock

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