Leading S&P Global Ratings economist Beth Ann Bovino has cautioned US investors to brace themselves for persistent inflation, rising unemployment, high-interest rates, and a recession.
In the US, inflation jumped to a 40-year high of 9.1% in June and remained above the Federal Reserve’s annual target of 2% at 7.7% in October. Bovino said that although inflation has likely peaked, the Fed’s target may not be reached until late 2024. By the second quarter of the following year, she forecasts that rates would peak at a range of 5% to 5.25%. In keeping with the recession of 1969–1970, Bovino projects a 0.8% decline in the gross domestic product (GDP) from peak to trough. Bovino emphasized that the next downturn might increase unemployment from 3.7% in October to 5.6% in the fourth quarter of 2023, despite the fact that the most recent US jobs report was stronger than anticipated.