(Reuters) – With inflation in the United States running at levels not seen in four decades, market participants worry the Federal Reserve has fallen far behind the curve and will need to move aggressively to bring down the prices, which might end up tipping the economy over into a recession.
These concerns have led to a rout in U.S. equities in recent months, and prompted banks to roll out bearish forecasts. [.N]
Here are some estimates from major banks on the possibility of a recession in the United States:
Old
Bank Commentary on New year-end PT
recession price target
for S&P 500
Goldman Estimate a 35% 4,300 4,900
Sachs chance of a
recession in
U.S. in next two
years
Barclays Plc Risks to S&P 500 4,500* 4,800
“remain firmly
stacked to the
downside” given
numerous
negative
near-term
catalysts
Wells Fargo Expects mild 4,200-4,400 4,500-4,700
U.S. recession
at the end of
2022, early
2023; also cuts
year-end 2022
GDP growth
target to 1.5%
from 2.2%.
Morgan Says there is a 3,400*
Stanley 25% probability
for a recession
in next 12
months
Bank of Sees recession 4,500 4,600
America Corp risks as “low
for now but
elevated for
2023″
Credit Believes there As low as
Suisse is a high 3,350 in
recession risk bear-market
for U.S. in the scenario
second half of
2023 and for
Europe this year
JPMorgan Says equity 4,900* 5,050
Chase & Co markets pricing
in too much
recession risk;
Advocates
risk-taking in
U.S. and Euro
area equity
markets
HSBC Expects a severe 4,450 4,900
Holdings PLC slowdown in
global growth
momentum
in Q2 and Q3
Deutsche Sees no 4,750 5,250
Bank AG recession
imminently, but
warns a
prolonged market
sell-off risks
sliding into a
self-fulfilling
recession
Source: Research notes from banks, *media reports
(Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
