US Economy Recession This Year Is Now More Likely Than Not, Nomura Says

The US economy is expected to fall into a mild recession by the end of the year of 2022, according to economists.

Financial conditions will tighten further, consumers sentiment is souring, and the global growth outlook has deteriorated.

With rapidly slowing growth momentum and a Fed committed to restoring price stability, we believe a mild recession is more likely than not.

They said excess savings and consumer balance sheets will help mitigate the economic contraction but noted that monetary and fiscal policy will be constrained by high inflation.

The projection for this year's real GDP is 1.8%, compared to 2.5% earlier, and the projection for next year is 1% lower than previously.

Treasury Secretary Janet Yellen said on Sunday that she expects the US economy to slow down due to high prices.

The president of the Federal Reserve Bank of Cleveland said on Sunday that it will take several years to return to the central bank's 2% inflation goal.

The Fed's response to the downturn will be gradual with monthly inflation likely to remain elevated.

The terminal rate in February was 3.50-3.75%, compared to the previous forecast of 3.75-4.00%.