At least one big bank has called for a recession this year.

Sizzling inflation, exhausted Americans, and an aggressive Fed walking into the bar— Everyone and their uncles seem to have their own opinion on what happens next.

(Hint: Most punch lines aren’t very funny.)

I’m Phil Rosen and today I’m going to explain why one of Wall Street’s top firms adjusted their economic forecast after yesterday’s new inflation data and now expects a recession to come sooner or later.

Also, if you didn’t see yesterday, Insider is seeking nominations for its new series “100 People Transforming Businesses” – take a look.

no free time…

If this is forwarded to you, register here. Download Insider’s app here.

Fed Jerome Powell

Jerome Powell’s Fed has pledged to cool overheating inflation.

Olivier Dourier/Getty Images

1. Bank of America says the U.S. will experience a mild recession this year. Americans are being trapped by a so-called “inflation tax,” which weighs on spending power as consumers spend less on goods and services, analysts wrote in a note Wednesday.

Before yesterday, the bank had forecast a recession and the U.S. would avoid an outright contraction. But Bank of America quickly adjusted its course on the same day the new government data was released.

Yesterday, the consumer price index for June came in at 9.1%, above expectations of 8.8%, and the bank said overall economic momentum was slowing as financial conditions tightened.

“The Fed has expressed a desire to restore price stability and is willing to accept at least some labor market pain in the process,” Bank of America analysts wrote.

But the slowdown isn’t just for the U.S. — The IMF is preparing to cut its global growth forecast for the second time in three months, as inflation, China’s COVID-19 lockdown and the war in Ukraine batter economies.

Downside risks have worsened since the last G20 meeting in April, IMF Managing Director Kristalina Georgieva said in a statement on Wednesday.

In her words: “It’s going to be a tough 2022 — maybe even a tougher 2023, with an increased risk of recession.”

American flag and Wall Street sign.

Fabrice Cabo/Getty Images

2. U.S. stock futures fell in early trading on Thursday, After Wednesday’s consumer price data reinforced expectations for more aggressive rate hikes. Here are the latest market moves.

3. The big banks are on deck today: JPMorgan Chase, Morgan Stanley, First Republic Bank and more are reporting. Also, take note of the U.S. Department of Labor’s expected weekly unemployment insurance claims report this morning.

4. Wall Street’s top firms agree that the stock market will rebound in the second half of the year, but their forecasts vary widely. JPMorgan, Goldman Sachs, Morgan Stanley and others have all made forecasts for the rest of 2022. See what these heavyweights expect to happen next — and how they’re investing.

5. “Rich Dad Poor Dad” author Robert Kiyosaki says he is eager to buy cheap bitcoin and real estate in the current market. He’s celebrating the market plunge as he sells key assets, noting that he has cash on hand to snag a bargain — something he advises other investors to do as well.

6. Wharton’s Jeremy Siegel believes the U.S. economy has passed the peak of inflation. However, Siegel said the Fed needs to be very careful to prevent an economic slowdown. That’s why he still expects the Fed to raise rates by 75 basis points this month.

7. An economist explains how the euro fell below the dollar after the world’s major currencies hit parity this week. The Boston College professor said the ECB may not actually act to stop the decline: “I don’t think the ECB is really in a hurry to raise the euro, it will allow the export sector, including tourism, to benefit from the current situation.” “

8. The blockchain founder who identified Bitcoin’s tops and bottoms just shared new price targets for Bitcoin and Ethereum. He recommends waiting for the actual bottom, which could be much steeper than previous bear markets. These are four things investors should know as they ride out the digital asset winter.

9. US stocks According to Morningstar, it is trading at historic lows, Investors should “wisely add” while they can buy at a discount. Here are the 33 most undervalued companies to buy in the second half of 2022.

Consumer Price Index

Andy Kiers / Insider

10. Here are the historic levels the consumer price index just hit on Wednesday. It accelerated at its fastest pace since 1981, with a better-than-expected reading. Read the full report to find out what the numbers tell us about the economy.

Keep up to date with the latest market news by checking out Insider’s The Refresh, a dynamic audio news briefing from Insider’s newsroom. Listen here.

Curated by Phil Rosen, New York. (Feedback or tips? Email or twitter @philrosnn).

Edited by Max Adams (@maxradams) in New York and Harlem Bullock (@hallam_bullock) in London.

Leave a Comment

%d bloggers like this: