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Bloomberg model forecasts 100% probability of recession in the United States, in less than a year

There seems to be no turning back. The recession in the United States would be something so certain in the next 12 months, that the experts are already launching to make the forecasts.

The estimate was made by Bloomberg Economics, through its famous projection model, according to which the powerful economy would be impacted by inflation and by the Federal Reserve’s measures with interest rates, precisely to try to contain the escalation Of the prices.

The forecast is still a blow to the economic messages that President Joe Biden has sent, who insists that variables such as employment, which would be one of the main signs of an economic recession, are not affected.

The Bloomberg economists, Anna Wong and Eliza Winger, are the authors of the latest probability models that are beginning to cause uncertainty, taking into account the weight that the United States has in the global economy. According to experts, the 12-month estimate of a recession now reaches 100%, compared to 65% previously for that period (one year).

The forceful prognosis goes directly to the position of Biden, who has repeatedly said that the United States will avoid a recession and that any recession would be “very slight”.

His messages are framed in the proximity of mid-term elections, in which the president of the United States aspires to maintain at least the majority of the participation of Democrats in one of the two chambers of Congress, which, according to analysts , would be leading him to ensure and try to position among Americans, the idea that the economy is and will be on a solid footing under his administration. At the moment, the Democrats have a narrow majority in both houses of the Legislative branch.

However, the reality that the inhabitants of the United States live in is that of the tightening of financial conditions, with more expensive credits and persistent inflation that, until now, has not yielded with the measures applied by the Federal Reserve (tightening the rates of reference interest), with the expectation of continuing on the path of more aggressive measures.

For many experts, it implies that the tighter the cost of credit, the higher the risk of a greater contraction of the economy.

President Joe Biden condemned Russia's new attacks on Ukraine
United States President Joe Biden, – Photo: Getty Images/Chip Somodevilla/Staff Photographer

Different points of view.

It should be noted that, recently, a study was carried out through a survey in which 42 economists participated. The bottom line is that experts predict the probability of a recession in the next 12 months to be 60%, up from 50% the previous month. However, the forecast model from Bloomberg Economics has an even higher probability of a recession.

The truth is that, even with Biden’s optimism, inflation in the United States has remained at highs not seen for four decades. That (inflation) would be one of the main threats to the economy, which is one of the most important variables for voters in that country.

The kind of Bloomberg Economics uses 13 macroeconomic and financial indicators to predict the possibility of a recession in horizons of one month to two years. And although the disclosed forecast is for a year, the possibility that the blow will arrive much earlier is not ruled out.

That is how The model predicts that the probability of a recession in the United States, 11 months from now, is 73%, up from 30%, and the ten-month probability increased from 0 to 25%.

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