Probabilities of recession next year in the US would be 30%

The chances of a recession in the United States within the next year are steadily increasing.

The probability of a recession over the next 12 months is now 30%, the highest since 2020, according to the latest monthly Bloomberg survey of economists.

That’s slightly up from 27.5% in April and double the odds economists projected just three months ago. The survey was conducted between May 6 and 11 and included responses from 37 economists.

Recession fears have been on the rise in recent weeks. Inflation is hovering at its highest levels in decades and prices are likely to remain elevated for quite some time.

The Federal Reserve appears firmly committed to rapidly cooling inflation with aggressive interest rate hikes.

However, the central bank faces a difficult task: to cool the economy enough to moderate price increases, but not so much that the economy falls into recession.