Bank of America economists withdrew their forecast for a U.S. recession, becoming the first major Wall Street firm to formally change its forecast amid growing optimism about the economic outlook.
Just a week ago, Fed Chairman Jerome Powell said the Fed’s own economists were no longer predicting a recession.
Bank of America economists led by Michael Gapen pointed to improving economic outcomes over the past three months, including low unemployment and easing price pressures, as key to changing their forecasts.
“Economic activity has grown by an average of 2.3 percent over the past three quarters, the unemployment rate remains near record lows, and wage and price pressures are moving in the right direction, albeit gradually.”
They forecast GDP growth of 2% for the quarter ending December this year, 0.7% in 2024 and 1.8% in 2025.
The forecasts for 2024 and 2025 are 0.5 percentage points and 0.7 percentage points higher than previously, respectively.
