A recession is now likely next year, most economists say. But so far that grim warning has been accompanied by this silver lining: Any downturn almost certainly will be mild.
In recent weeks, however, the odds of a more severe slump that would mean millions more job losses have been rising, they say.
Some economists blame a Federal Reserve that’s aggressively raising interest rates in a single-minded mission to tame stubbornly high inflation, even if it risks a recession.
“If the Fed keeps raising rates it could cause more damage,” says Bob Schwartz, senior economist at Oxford Economics.
Economists also point to intensifying economic troubles in Europe, Chinese COVID-19 lockdowns that could escalate this winter, a sharp U.S. housing slowdown and even a U.S. job market that has been so resilient it’s prompting even bolder Fed action, among other factors.
