Will the U.S. economy fall into recession in 2025? Top economists are placing their bets!
Economists believe that the strike at ports on the East Coast of the United States may bring temporary supply disruptions, but there may not be major long-term effects.
The risk of a U.S. recession appears low as the Federal Reserve begins a rate-cutting cycle, but a weak job market and rising credit defaults could pose a double threat, top U.S. economists say.
In their semi-annual forecast, the top economists of the American Bankers Association put the probability of a U.S. recession in 2025 at just 30%.
They believe that a more likely scenario is that the Fed will achieve an elusive "soft landing," in which a period of high interest rates will reduce inflation without triggering a recession.
The Fed has only managed to achieve a soft landing once or twice since World War II. Most of the time, when the Fed raises interest rates to cool an economy it deems overheated, a recession often follows.
To combat the worst outbreak of inflation in 40 years, the Fed has raised interest rates sharply in 2022 and 2023.