After taking over the chief economist gig at Bank of America last July, Michael Gapen quickly warned that the U.S. economy was headed for a “mild recession” by year’s end. Gapen’s predecessors had long avoided overly bearish predictions, but he feared the worst amid persistent inflation and rising interest rates. However, the former Barclays exec revised his initial forecast in September after consumer spending and the labor market “held up” better than he’d expected, arguing that a mild recession wouldn’t come until the first half of this year.
And now, as with many of his peers, Gapen’s forecasts have proven to be, at the least, a bit premature. Despite stubborn inflation and doomsday predictions from billionaire investors, the U.S. economy continues to push forward, with the unemployment rate sticking near pre-pandemic lows and retail sales proving to be resilient. The stock market has also rebounded after a dismal 2022. The S&P 500 is now up more than 15% year to date amid investors’ increasing enthusiasm over the potential for A.I. to reshape the global economy.
