Federal economists warn that a recession is "plausible" in 2023

Federal economists warn that a recession is “plausible” in 2023

The possibility of a threat recession has lingered over the past year as the housing market fluctuates, massive layoffs unroll, and inflation remains consistently high.

Now, Federal Reserve economists are warning that the United States could be heading for a recession in 2023.

Related: We could be heading for a recession, but a “bigger catastrophe” could be on the horizon

At a joint meeting earlier this month of the Federal Open Market Committee and the Federal Reserve Board of Governors, the organizations warned that a recession occurring this year is “plausible.”

Given “slow growth” in private domestic spending and “tight financial conditions” this year, economists have raised “the possibility of a recession later this year as a plausible alternative to the baseline scenario.” the fed said.

In response to the excitement inflationthe Fed lifted interest rate up nearly 4.5% over the past year in an attempt to rein in the rising costs of just about everything. Despite economists’ suggestions that cutting consumer energy prices and food prices could slow the rate of inflation, they warned that prices could still remain high throughout the year and into ‘in 2024.

The organization also said that “the likelihood of the economy entering a recession in 2023 remains high”, while noting that the committees will remain vigilant and stand ready to “adjust the monetary policy stance as needed if risks emerging markets that could impede the achievement of the Committee’s goals,” meaning the Fed could continue to raise interest rates if necessary.

Related: Americans are ‘reluctant’ to spend big, new Fed report says – here’s what it means

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