A major recession is coming, Deutsche Bank warns

Deutsche Bank raised eyebrows earlier this month by becoming the first major bank to forecast a US recession, albeit a “mild” one.

Now, it’s warning of a deeper downturn caused by the Federal Reserve’s quest to knock down stubbornly high inflation. “We will get a major recession,” Deutsche Bank economists wrote in a report to clients on Tuesday. The problem, according to the bank, is that while inflation may be peaking, it will take a “long time” before it gets back down to the Fed’s goal of 2%. That suggests the central bank will raise interest rates so aggressively that it hurts the economy. “We regard it…as highly likely that the Fed will have to step on the brakes even more firmly, and a deep recession will be needed to bring inflation to heel,” Deutsche Bank economists wrote in its report with the ominous title, “Why the coming recession will be worse than expected.”

Behind the curve

Consumer prices spiked by 8.5% in March, the fastest pace in 40 years. The jobs market remains on fire, with Moody’s Analytics projecting that the unemployment rate will soon fall to the lowest level since the early 1950s.
To make its case, Deutsche Bank created an index that tracks the distance between inflation and unemployment over the past 60 years and the Fed’s stated goals for those metrics. That research, according to the bank, finds that the Fed today is “much further behind the curve” than it has been since the early 1980s, a period when extremely high inflation forced the central bank to raise interest rates to record highs, crushing the economy.
History shows the Fed has “never been able to correct” even smaller overshoots of inflation and employment “without pushing the economy into a significant recession,” Deutsche Bank said. Given that the job market has “over-tightened” by as much as two percentage points of unemployment, the bank said, “Something stronger than a mild recession will be needed to do the job.” The good news is that Deutsche Bank sees the economy rebounding by mid-2024 as the Fed reverses course in its inflation fight.

READ MORE HERE

Spread the love
                

Share This Story, Choose Your Platform!

About the Author: Patriotman

Patriotman currently ekes out a survivalist lifestyle in a suburban northeastern state as best as he can. He has varied experience in political science, public policy, biological sciences, and higher education. Proudly Catholic and an Eagle Scout, he has no military experience and thus offers a relatable perspective for the average suburban prepper who is preparing for troubled times on the horizon with less than ideal teams and in less than ideal locations. Brushbeater Store Page: http://bit.ly/BrushbeaterStore

12 Comments

  1. anonymous April 28, 2022 at 07:50

    So for people that have had money in bank gaining miniscule, teeny tiny interest rates for years, this could change dramatically ? As in these accounts could receive a strong shot in the arm ? I remember the 1980’s when interest rates were far higher, an 18 month CD receiving more than 10% interest if my memory is still working correctly.

    I know the people who are underwater in debt and owe money on their homes will take a hit. But for those who own what they have free and clear and have some money in the bank, this might not be all bad news.

    • wwes April 28, 2022 at 07:56

      The interest rate you receive on deposits won’t matter, because whatever gains are accrued will just be inflated away (by real world inflation, not those BS numbers that we see published by the government), most likely faster than it is accrued. Better to put that fiat currency into real money, and tangibles.

  2. RP April 28, 2022 at 08:06

    News flash….its already here and will just get worse.

  3. Centurion_Cornelius April 28, 2022 at 08:37

    Yeah–right–a “mild” recession? Like being “mildly” pregnant?

    Gimme a break! These “soy-boys” experts predicting all this–sitting behind desks all day punching in “data” that they don’t know their arse from a hole in the ground.

    Show me one with calluses on his hands or a few mangled fingers from working on a oil rig, steel mill, or farm tractor and I’ll change my mind. I’ll listen to advice given by real WORKERS, with hands and feet in the mix. Not BS artists whose debt-slavery salary depends on promoting “the con.”

    Any person with two brain cells functioning can see what’s happening. VERY rough road ahead.

  4. AK49 April 28, 2022 at 09:34

    Seeing as the peasantry will never revolt I hope one of these days their pump and dump routine gets out of control and they have to suffer the consequences.
    Will be a beautiful day when Wall St. is raining bankers and hedge fund managers.

    Gets pretty old being routinely sheared like a sheep for the benefit of the non-productive classes.

    • Scipio April 28, 2022 at 10:01

      Loved, “Will be a beautiful day when Wall St. is raining bankers and hedge fund managers.” !

    • NC Scout April 28, 2022 at 10:19

      A great question is exactly why the peasantry won’t revolt.

      Gramsci had some interesting thoughts.

      • Ghostmann April 28, 2022 at 14:28

        “Gramsci is best known for his theory of cultural hegemony, which describes how the state and ruling capitalist class – the bourgeoisie – use cultural institutions to maintain power in capitalist societies. The bourgeoisie, in Gramsci’s view, develops a hegemonic culture using ideology, rather than violence, economic force, or coercion. Hegemonic culture propagates its own values and norms so that they become the “common sense” values of all and thus maintain the status quo. Cultural hegemony is therefore used to maintain consent to the capitalist order, rather than the use of force to maintain order. This cultural hegemony is produced and reproduced by the dominant class through the institutions that form the superstructure. ”

        Is this what you were referring to?

        • NC Scout April 28, 2022 at 15:16

          Yep.

  5. Publius April 28, 2022 at 10:50

    They won’t revolt because the Marxist ideology has been incubated in American society for many years (per Gramsci’s plan). The proletariat have been conditioned to accept the takeover of Socialism.

  6. Delroy April 28, 2022 at 13:25

    Interesting side note, the son of the former Deutsch Bank president who committed suicide in 2014(?), and was also involved in the Clinton Russia gate hoax was found dead a few days ago in I think Los Angeles. Arkancide??

    • Paul April 28, 2022 at 20:29

      Y’all keep saying “they”, the peasentry, won’t revolt like we ain’t part of them. None of us will revolt until they’re on your door step trying to take what you have. We won’t revolt because we don’t want to lose everything we’ve worked hard for, we don’t want to be in prison like the J6 folks, we don’t want our families targeted by a tyrannical gubment. There will never be a revolt. There will be those of us becoming as self sufficient as possible, becoming gray man and putting in our time in the system. It ain’t heroic or seal team 6 stuff but it is what it is. Reality ain’t the way you wish things to be, not the way they appear to be but the way they actually are.

Comments are closed.

GUNS N GEAR

Categories

Archives

Spread the love