Why a US recession is probably coming | CNN Business

Want to know what the future holds for the US economy? You’ll have to consult your crystal ball. But if that doesn’t work, Jake Jolly, head of investment analysis at BNY Mellon Investment Management, has outlined three possible scenarios, each considering the impact of the banking crisis, the “stickiness” of inflation, and the path of rate hikes by the Federal Reserve. Each year, Jolly and his team debate scenarios for the economy going forward.

Job loss is minimal as wage growth decelerates alongside inflation. China’s reopening has positive spillover effects and is, on balance, disinflationary for core goods. “This is a challenging business cycle to read,” said Jolly. “There are dynamics in the post-Covid world that are weird: The labor market not behaving in ways we would have expected it to at this point. It’s possible that the economy sees disinflation in a way that it hasn’t in previous cycles.

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