Experts have differing opinions on the severity of the situation, but no one is denying the risks anymore. BCA Research almost certainly indicates that a recession will occur in the United States and Canada next year. Their argument is that the labor market is too unstable and consumer spending is rapidly declining. Although there won't be a disaster like in 2008, there will be damage.
Goldman Sachs, the eternal optimist, suggests not to jump to conclusions too quickly. They are betting on a GDP growth of 2.5% in 2025 and place the likelihood of a recession at only 15%. They hope that the policy changes of the next government will not be too drastic.
However, JPMorgan has poured cold water on Goldman Sachs' optimistic outlook. They assess the risk of recession at 45% and point out that the contraction of the money supply and potential global shocks are the main threats.
Let's talk about the numbers. The GDP growth forecasts for 2025 vary. Goldman Sachs' 2.5% is on the high end, while some estimates are as low as 1.9%. What about the unemployment rate? It is expected to hover around 4.2%, but if inflation remains controlled, it could drop to about 3.5%.
So what about the Federal Reserve? They are unlikely to lower interest rates more than twice next year, so inflation may rise early in January.
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