The odds of a U.S. recession are rising. And the chances it will be mild are falling.
The seeds of an eventual downturn are being sown by a taut jobs market that is pushing up wages and inflation, prompting the Federal Reserve to raise interest rates further into restrictive territory to get price pressures under control.
“The higher the Fed needs to go on the terminal rate, it raises our conviction that a recession will happen next year,” said Deutsche Bank AG chief U.S. economist Matthew Luzzetti. “But it also raises the risk it will be a deeper one.”
