Next recession will likely be a 'mild' one, economists say

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Next recession will likely be a 'mild' one, economists say
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The next recession will be mini compared to the last 2 — and feel completely different

, don't worry too much, because the next downturn likely won't be anything like the Great Recession or the sharp slide during the early pandemic.are projecting recessions starting next year on the grounds that there's just no way for the Fed to fight inflation without slowing the economy to a halt. For the first time since the early 1990s, economists see the country on track for a fairly normal recession.

The coming downturn would also look dramatically different from the coronavirus recession. Daily COVID-19 infections, while up from levels seen earlier in 2022, are still leagues below the highs of the Delta and Omicron waves. Restrictions have been all but entirely reversed, and. Today's economy has much more in common with the pre-pandemic situation than that of early 2020.

"Just having goods spending pull back to its pre-COVID trend is enough for a mild recession," Ryan said. The central bank has a herculean task on its hands. Raising interest rates too quickly can weaken demand so much that spending nosedives, companies lay off workers, and economic growth plummets. Moving too slowly, however, could keep inflation at worrying highs and further erode Americans' buying power.

For consumers, the Fed's crusade against inflation will be like a fever: uncomfortable, but necessary for healing. Rate hikes lift borrowing costs throughout the economy, making mortgages, car loans, and credit-card debt more expensive.

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