One More Wall Street Bank Ceases Recession Caution for 2023

JPMorgan Joins Wall Street’s Trend, Pauses Recession Warnings Until 2024

Following suit with the current trend on Wall Street, JPMorgan has decided to suspend its recession warnings until 2024, as reported by Business Insider.

A few days prior, Bank of America had put forth the notion that a recession might not manifest until the following year, if it happens at all.

JPMorgan now aligns itself with the growing sentiment among Wall Street banks, pushing its recession projection to 2024. This shift in stance is rooted in the continued robustness of U.S. economic growth in the third quarter. The bank posits the possibility of a phase characterized by moderate, yet uninspiring economic growth that, nevertheless, won’t culminate in a full-scale recession.

“The economy is maintaining a robust growth trajectory, prompting us to revise the real GDP annual growth rate for the ongoing quarter from 0.5% to 2.5%,” explained Michael Feroli, a representative of JPMorgan. “Given these dynamics, we harbor doubts about the economy rapidly losing steam to a point where it would initiate a moderate contraction as early as the next quarter.”

Based on the most recent GDP projections from the Federal Reserve Bank of Atlanta, the third quarter anticipates an annualized growth rate of 3.9%.

It’s evident that the recalibration of recession forecasts by major banks like JPMorgan and Bank of America is a reflection of the intricate interplay between economic data and the evolving global landscape. The decision to push back recession predictions to 2024 suggests a certain degree of cautious optimism, backed by the resilience observed in the U.S. economy during recent quarters.

These adjustments highlight the dynamic nature of economic forecasting, where various factors such as fiscal policies, international trade dynamics, and technological advancements can influence the trajectory. The decision of JPMorgan to align its projections with this new outlook underscores the need for financial institutions to stay attuned to real-time developments.

However, it’s essential to remember that forecasting economic events is inherently complex and subject to change, especially given the unpredictable nature of global events. These shifts in recession projections also underscore the importance of regularly monitoring economic indicators and being prepared to adapt strategies based on the ever-changing economic landscape.