JPMorgan’s economists offered some light on the global perspectives they anticipate revealing in 2023 and 2024.They contend that there is a greater chance of the US entering a recession than of preventing one.The investment bank outlined four likely global outlook scenarios, with the “boil the frog” recession emerging as the justifiable consequence, according to a statement by Business Insider.
The expression “boiling the frog” is frequently used to describe a scenario in which individuals ignore a potential issue until it worsens and eventually bubbles over.The company highlighted the likelihood of a recession by stating that it is the most likely result.The outcome, which has a 36% likelihood, involves the US entering a recession along with the rest of the world’s economies.The main cause of this problem is aggressive monetary tightening in reaction to inflation, which JPMorgan expects to remain consistently high. “The Central bank aspirations for a soft landing have tempered the pace of tightening. However, hopes for a painless slide in inflation back to target are likely to be dashed, requiring policy to turn sufficiently restrictive to break the back of the expansion,” the analysts explained. “Broad-based developed-market tightening points to a more synchronized global downturn sometime in 2024.”
The second most likely scenario, according to experts, is a “slip-sliding away” recession, which has a 32% likelihood of occurring.A continuation of the continuing credit crunch forces the US into a downturn from late 2023 to early 2024, while other economies across the world continue to be strong.According to JPMorgan, the US currently has a 23% probability of experiencing a Goldilocks soft landing, in which the economy completely avoids a recession. Additionally, it sees a 10% likelihood that the US would see a sudden economic slump in the middle of 2023.