BofA economists predict recession in early 2023

The Bank of America BofA economists predict that a recession will occur in the first quarter of 2023.

The market's value could drop as low as 3,000 based on a panoply of indicators, given a host of risks we face as payback continues and a recession unfolds, Savita Subramanian, BofA head of US equity strategy, said in a statement.

There is no official definition of a recession, but many economists say it is a period of two consecutive quarters of negative economic growth or gross domestic product GDP decline, a drop that has already been seen in 2022.

Many Americans believe that the U.S. is already in a recession. More than half or 56% of Americans believe that the country is in a recession, according to a poll by YouGovAmerica and The Economist.

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In addition to the recession fears, Americans may be affected by rising interest rates in 2023.

The Federal Reserve has increased interest rates six times in the past six months in order to fight high inflation. For the fourth straight month in November, the Fed increased the benchmark interest rate by 75 basis points.

The interest rate bump pushed the benchmark federal funds rate to a range of 3.75% to 4% or the highest rate since the 2008 financial crisis.

Interest rates for financial products, such as credit cards, may be affected by any increase in the federal funds rate in 2023, even if smaller interest rate hikes are seen in 2023.

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In the midst of a potential recession, Americans might not see an end to the high-than-normal prices on basic goods and services in 2023. The Mortgage Bankers Association MBA believes that inflation won't reach the target levels until 2024.

Mike Fratantoni, the MBA's chief economist and senior vice president, said at the Market Outlook session at the 2022 MBA Annual conference in Nashville that we won't be at the Fed's inflation target until 2024.

The Consumer Price Index CPI increased by 7.7% year-over-year in October. This is a little less than the 8.2% annual increase in September. The inflation rate remains close to the year high of earlier this year.

According to the October study by Clever, more than half of Americans or 78% believe that inflation is a crisis.

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