But What if We Don’t Get a Recession in 2023? That Would Be a Bummer for Wall Street.

April 20, 2023

by Wolf Richter Wolf Street

Just a slower-growth muddle-through economy that adjusts to higher rates and sticky inflation.

It makes sense to see a recession later this year. The Fed has hiked interest rates with the top of its policy rates now at 5.0%. Businesses and consumers haven’t had to deal with these kinds of short-term interest rates in 15 years. Three banks have blown up because long-term rates have risen sharply, and they got caught not preparing for it, and depositors then pulled the rug out from under them. Economists are widely predicting a recession later this year. Even the Federal Reserve’s staff projections, prepared for the March meeting and mentioned in the minutes, included the possibility of “a mild recession starting later this year.”