The next downturn won't be like the Great Recession or the early Pandemic, so don't worry.

There is no way for the Fed to fight inflation without slowing the economy to a halt, which is why Wall Street giants like Bank of America andDeutsche Bank are projecting recessions next year.

Even if those predictions come to light, it is probably not going to be that bad.

For the first time since the early 1990s, economists think the country is headed for a normal recession. According to experts, it will be a correction after a year of overspending in the economy. The country won't feel the pain of previous downturns as Americans rein it in.

Susan Sterne, president and chief economist at Economic Analysis Associates, told Insider it doesn't look like consumers are overextending themselves financially as they did in 2008.

She said that she doesn't think we are in such excesses that the consumer pulls back for an extended period of time.

The coming downturn would look very different from the coronaviruses recession. The daily COVID-19 infections are still below the highs of the Delta and Omicron waves. The summer travel season is in full swing and restrictions have been completely reversed. The pre-pandemic situation is more similar to the current economy than early 2020.

The type of recession we are looking at is not like a huge downturn in consumer spending.

The service industry is set to win the next recession as people are eager to get back out there 

The recession will be powered by a return to more normal economic activity, according to a senior US economist atDeutsche Bank.

Ryan said that Americans faced a "perfect storm" of inflation, interest rates, and economic aid drying up. The trend will mainly hit Americans with elevated spending on goods like furniture, cars, and clothes, as opposed to services like movie theaters, bars, and transportation.

Goods spending Deutsche Bank

The switch won't be dramatic enough to cause a catastrophic downturn like the Great Recession, but it will pull growth lower.

Ryan said that just having goods spending pull back is enough for a mild recession.

Services are poised to thrive during the downturn. Spending on healthcare, lodging, and travel is expected to climb as the sectors return to their pre-pandemic trends. Ryan said that the economy would not suffer a larger drop in activity.

The recession is likely to be a bifurcated one. Alex Lin, a senior US economist at Bank of America, told Insider that Americans haveaccumulated a ton of wealth over the course of this cycle. Service businesses will be on the rebound, while goods producers will face a rude awakening as the country enters its new normal.

The biggest risk lies with the Fed

There are several factors that could transform the mild recession into a severe downturn. The Fed is trying to pull price growth to more sustainable levels.

The central bank has a lot of work to do. Raising interest rates too quickly can cause companies to lay off workers and cause economic growth to plummet. If you move too slowly, you could keep inflation high and erode Americans' buying power.

The central bank will be flexible in its monetary policy tightening plans. Fed Chair Powell has said that policymakers aren't banking on a solution coming soon because supply-chain problems continue to prop up inflation. The recovery will be difficult if the Fed does not bring demand in line with supply.

The margin of error is very narrow. The Fed can't slow things down very precisely.

The Fed's crusade against inflation will be uncomfortable, but necessary for healing. Mortgages, car loans, and credit-card debt are more expensive because of rate hikes.

The policy works with a lag of about six to 12 months, meaning it won't affect inflation until later in 2022.

There may be some pain associated with getting back to 2% inflation, according to Fed Chair Powell.

At the end of the tunnel there are some signs of light. There are no strong signs of over leverage in the economy and household balance sheets are stronger than they were before the financial crisis. There is reason to believe that spending will keep growing and economic growth will settle at a healthy clip once inflation trends lower.

The chances of a quick recovery are pretty good as the consumer emerges out of the next recession.