US likely to go into recession

Almost 70% of economists expect the US to fall into a recession as the country sees a rise in its inflation level to 8.6% in May, the highest seen in over 40 years.

This was revealed in a poll conducted by the Financial Times. A chunk of these economists expects a recession to be declared in the first half of

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Their prediction comes at the back of the US inflation level soaring to 8.6%, exceeding expectations that it will stay at 8.3% and piling pressure on the Federal Reserve.

The survey revealed that less than 40% of the leading economist declared that a recession would come in the first or second quarter of 2023, with the remaining saying it would come in the latter part of 2023.

According to the survey conducted by Financial Times, the Federal Reserve is taking action to bring down the soaring inflation. For April and May alone, inflation rose by 1% and analysts are expecting bigger interest rate hikes from the Federal Reserve.

Goldman Sachs economist, led by Jan Hatzius, asserted that they expect the Federal Reserve to hike interest rates by 50 basis points at the June, July, September, and November meetings.

Their expectation is that the interest rate will peak at 3.25% - 3.5% after two further 25 basis point hikes in December and January.

The economists expected inflation to keep rising and confirmed energy price hikes from the Russian invasion of Ukraine would be the biggest driver.