Rating agency Fitch cut US growth forecasts for this year and next and will warn on Tuesday that rising Federal Reserve (Fed) interest rates and inflation will push the US economy into a recession as that of 1990, according to CNN.
Fitch expects the gross domestic product (GDP) of the United States to grow only 0.5% next year, compared to 1.5% that the agency's forecasts considered in June, reported CNN, which bases its information on a report by the rating agency .
Fitch's economists expect the recession in the country to be fairly mild and the unemployment rate to rise from the current 3.5% to 5.2% in 2024, implying the loss of millions of jobs, which, however, will be less than the of the two previous recessions, according to the report.
According to Fitch, high inflation "will prove to be too great a drag" on household incomes next year, as it will reduce consumer spending and cause it to recede during the second quarter of 2023, the report added.
US consumer prices rose more than expected in September and underlying inflationary pressures continued to build, reinforcing expectations that the Federal Reserve will make a fourth interest rate hike of 75 basis points in the month to come. comes.
Inflation is well above the Fed's 2% target, despite moderating as supply chains loosen and oil prices retreat from spring highs.