With the economy showing relative strength in 2023, even in the face of aggressive interest rate hikes, many previously bearish economists and Wall Street titans have flip-flopped on their predictions for a recession. The Federal Reserve may be able to tame inflation without sparking a job-killing recession after all, they now argue—after warning of impending economic doom for over two years. But Oren Klachkin, lead U.S. economist at the independent economics advisory firm Oxford Economics, doesn’t buy the new rosy outlook.
“Some forecasters are removing a U.S. recession from their baselines. But we continue to think that elevated interest rates, restrictive Fed policy, and tight lending standards will cause a mild recession in late 2023,” he wrote in a Tuesday note.
