Talk of a looming recession is rampant around the globe, and now a major U.S. bank has issued its own dire forecast for the global economy.
It’s been over a month since Russia invaded Ukraine, leading to an unforeseen and prolonged fallout for the global economy. Combined with an inflation problem that was already spiking the prices of virtually every commodity, global institutions have begun ringing the alarm bells that we are on the brink of a long-anticipated recession.
In an investment strategy report sent to clients on Thursday, Bank of America analysts warned that “inflation always precedes recessions” and that tighter monetary policies being put in place to control surging prices make a “recession shock” very likely.
Inflation has been the bane of the U.S. economy for months, and rates have hit new highs since the war began. The annual inflation rate jumped to 7.9% in February, the highest it’s been in four decades, and the latest forecasts suggest March’s rate could reach 8.5%, according to investment bank UBS. Such a rate would be the highest since 1981.