FITCH Ratings  predicts a 1990-style Mild Recession in the next Spring!Here's a gist of Fitch Predictions

A COMEBACK OF 1990-Recession?

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Fitch Ratings predicts a 1990-style Mild Recession in next Spring that can affect the US economy!

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2

 The report says, the strong labour markets will cushion the blow of recession but the interest rate hikes and inflation will hence result in slowdown the Job Growth

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3

It also predicts the consumer spending to grow by 2.5% this year before slowing down to 0.9% in 2023

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4

It says the US economy will witness recession in 2Q23 although relatively mild than the historical standards.

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5

The prediction is similar to 1990s recession which led to Fed tightening in 1989-1990 and raising the interest rate

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6

The Fitch Rating sees the unemployment rate rising from just 3.5% today to a peak of 5.4% in 2024.

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7

“Downside risks stem from nonfinancial debt-to-GDP rations, which are much higher now than in the 1990s," Olu Sonola, head of U.S. regional economics for Fitch.

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What it means?The higher the debt-to-GDP ratio, the less likely the country will pay back its debt and the higher its risk of default, which could cause a financial panic.

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9

Despite rising recession buzz, the job market is tight with unbalanced flow of  supply and demand of labour

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10

Fitch is not the first financial services company to forecast a recession for next year.

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