Economists at Goldman Sachs have now cut their forecast for growth for the world's largest economy in 2022 to 1.75%, from 2% previously and the consensus of...
The U.S. stock market put in a resilient performance on Thursday, given the data showing inflation surging to a new 40-year high even before the impact of the recent sanctions on Russia, what appeared to be a pretty dismal result from the Russian-Ukrainian meeting of foreign ministers in Turkey, and a surprisingly hawkish decision by the European Central Bank.
It’s a pretty straightforward call. “Combining our commodity strategists’ forecasts with estimates of pass-through to consumer prices, we estimate that rising gas and food prices will create an effective 0.7 percent point drag on real disposable personal income in 2022 with larger drags for lower-income households whose spending is typically more sensitive to fluctuations in income,” said the note written by Joseph Briggs.
Recession risks, they said, are mounting. While they expect further service-sector reopening and spending from excess savings to keep the U.S. economy growing, they said the chances of a recession next year are between 20% and 35%, or roughly as implied by the slope of the U.S. Treasury yield curve. U.S. and European allies were set to revoke “most favored nation” trading status for Russia, as Russia announced an export ban on more than 200 products, ranging from medical equipment to locomotives.
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