Recession Now Very Likely This Year

Ambrose Evans-Pritchard: “The New York Federal Reserve’s internal model is flashing an 80% risk that the US economy will enter a sustained contraction in the second half of this year, much sooner than presumed just weeks ago. The chances of a ‘soft landing’ have dropped to 10%. If so, you can stop worrying about an inflationary spiral.”

“The institution’s ‘dynamic stochastic general equilibrium’ model points to an outright fall in GDP of 0.6% this year and a further fall of 0.5% next year. It likens the current picture to the 1990 recession under George Bush senior, triggered by the First Gulf War.”