Recession Coming in 2024: Economic Forecaster

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American industry will slow down next year, then fall into a recession the year after, according to ITR Economics, an economic forecaster.

“We’re still calling for more of a slowing growth cycle in 2023, but the original soft landing that we were calling around the end of 2023 now looks like it’s turning into a hard landing in 2024,” Patrick Luce, an economist with ITR, told The Epoch Times.

A key indicator that made ITR change the forecast was the inversion of treasury rates.

In July, the 10-year treasury yield sunk below the 2-year one and the inversion has been growing since. Such an inversion signals that investors are wary of the economic situation in the next few years and it historically tends to happen 12 to 18 months before a recession.

Luce blamed the bleak outlook on the Federal Reserve’s aggressive raising of interest rates this year, from virtually zero in March to more than 4 percent now.

“We see this year that the Fed pushes too hard too fast,” he said.

Fed Chair Jerome Powell has been saying for months that rates need to stay higher for longer in order to tame inflation.

Inflation escalated from less than 2 percent in early 2021 to more than 9 percent in June. It has since moderated to 7.1 percent in November.

The increase has been attributed to several factors, primarily the gigantic government spending during the COVID-19 pandemic, as well as supply chain disruptions caused by the lockdowns instituted in response to it.

The combination of the two factors “bottlenecked the system,” Luce said.

Other issues cited by some experts as affecting price inflation have been the restrictive domestic energy policy of the Biden administration and the war in Ukraine.

Powell has stressed that the Fed has little power over the supply side of the economy, but that he can try to close the production-consumption gap by taming demand.

The problem is, by the time the Fed is satisfied that inflation has been quelled, it may have already tightened the monetary policy too much.

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