Bankrate’s Fourth Quarter Economic Poll indicated that there is a 64% chance that the US economy will go into a recession in 2023.
Are you wondering who took the survey? We did, too.
According to the survey methodology says that the Fourth-Quarter 2022 Bankrate Economic Indicator Survey of economists was conducted Dec. 12-19, with survey requests emailed to economists nationwide. Responses were submitted voluntarily online, and there were about thirteen people who responded. Most of them are economists or in corporate leadership.
Still…thirteen respondents? That seems kind of low. But surveys like this one generate headlines and then ripple out into the media-sphere and perpetuate the idea that the economy will be bad in 2023.
Considering that the media outlets are all owned by a handful of people, it seems like a good idea to be skeptical of these kinds of headlines and especially do the due diligence before taking any action on these kinds of stories.
Bankrate also mentions that 7 out of 10 Americans said they were worried about a recession in an August 2022 poll, with another December 2022 poll similarly pessimistic.
Much of the blame is being placed on Jerome Powell’s leadership at the Fed and his plan to raise interest rates. Raising interest rates mean it’s more expensive to borrow money which cools off spending and real estate and other markets.
There is an inverse relationship between inflation and interest rates meaning that when interest rates go up, inflation goes down.
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