We can expect a recession in 2023, but it should be a mild one. That’s the forecast from University of Michigan economist Gabe Ehrlich, who says a recession is likely to help fight inflation.
“That is why we’re forecasting a recession,” Ehrlich said. “We think the Federal Reserve is going to keep raising interest rates and make sure it gets inflation back down closer to targets. We do expect inflation to come back down a lot closer to target over the next couple of years, just a little bit above 2% by 2024. So, we are forecasting stubborn inflation. It’s going to be with us a little while longer, but it should start coming down in a durable and noticeable way over the next couple of years. ”
Ehrlich says strong demand in the automotive sector should help Michigan avoid the worst effects of the potential economic downturn. He expects the Federal Reserve to continue raising interest rates through the middle of next year, but that should help keep a lid on inflation.
