Deutsche Bank says the U.S. is headed for a ‘policy led’ recession later—it’s the unavoidable ‘boom-bust cycle’

(Credit: Photographer: Krisztian Bocsi/Bloomberg via Getty Images)

In April of last year, just a month after Russia’s invasion of Ukraine, Deutsche Bank became the first major investment bank to predict a U.S. recession. Less than a month later, its economists upped the ante on their forecast, arguing that a “major recession” would hit by the end of 2023 or the first quarter of 2024 due to rising interest rates and stubborn inflation. 

But since then, the economy has remained surprisingly resilient even amid consistent headwinds. The unemployment rate stuck near pre-pandemic lows at 3.7% in May and GDP jumped 1.1% in the first quarter. The stock market is also on fire after a dismal 2022, with the S&P 500 rising more than 12% year to date as investors flock to A.I. plays.