CNBC commented on U.S. first-quarter GDP: The U.S. Commerce Department reported on Thursday that gross domestic product unexpectedly fell 1.4% in the first quarter, marking an abrupt reversal of the U.S. economy’s best performance since 1984. In the first three months of 2022, a combination of factors affected economic growth. Rising infections of the Omicron variant have hampered economic activity at the start of the year, while inflation has soared to its highest level since the early 1980s and the Russian-Ukrainian conflict has also brought the economy to a standstill.
While recession expectations on Wall Street remain low, the U.S. faces further trouble ahead: In response to rapidly rising prices, the Federal Reserve plans to implement a series of rate hikes aimed at further slowing economic growth.
While economists still largely don't expect the U.S. to slip into a full-blown recession, the risks are rising.
Goldman sees a roughly 35% chance of negative growth a year from now.
In a forecast, Deutsche Bank sees the potential for a “severe recession” in the U.S. economy in late 2023-early 2024, the result of the Federal Reserve's tightening of policy to curb inflation, far more strongly than forecasters currently expect.
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