The World Bank cut its global growth forecast Tuesday and warned that the world economy could enter a period of feeble growth and elevated inflation.

BOA Executive Warns Of Recession And Layoffs If Fed Doesn’t Ease Up

If the U.S. Federal Reserve continues its policy of aggressive interest rate hikes, the U.S. could lose hundreds of thousands of jobs, spiking unemployment, according to a Bank of America analysis, CNN reported.

If the U.S. Federal Reserve continues its policy of aggressive interest rate hikes, the U.S. could lose hundreds of thousands of jobs, spiking unemployment, according to a Bank of America analysis, CNN reported.

Bank of America’s Chief U.S. Economist Michael Gapen expects roughly six months of relatively high unemployment and a ‘mild recession,’ as the Fed’s aggressive interest rate hikes blunt consumer demand, he told CNN Monday.

However, Gapen also noted that the typical bounceback seen after a recession might be delayed if the Fed, which has been incredibly hawkish on interest rates, refuses to reduce rates.

In the news: Biden’s Student Loan Giveaway Faces Another Legal Challenge

The labor market showed signs of cooling in September, adding the fewest jobs of this calendar year as unemployment dipped to 3.5% from declining labor force participation.

Gapen anticipates that the U.S. will lose approximately 175,000 jobs per month early next year, according to CNN.

The Fed has been open about the expectation that interest rate hikes will prompt economic “pain,” leading to a weaker labor market.

The Fed currently expects unemployment to hold between 4.1% and 4.5%, with a median rate of 4.4% in 2023, even as inflation drops below 3.5%.

Visit Tampafp.com for PoliticsSports, and National Headlines. Support journalism by clicking here to our GiveSendGo or sign up for our free newsletter by clicking here

Android Users, Click Here To Download The Free Press App And Never Miss A Story. Follow Us On Facebook Here Or Twitter Here.

Copyright 2022 The Free Press, LLC, tampafp.com. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Advertisement

Login To Facebook From Your Browser To Leave A Comment