Forecaster: Risk of Recession Remains
The economy is beating expectations both domestically and locally, but there are still reasons to be cautious, the chief market strategist at Fifth Third Bank told Elkhart, Indiana-area business leaders Tuesday.
“What we’ve been trying to identify is, are we on the precipice of a recession?…Or are we seeing a little bit of a slowdown and we’ll continue to grow?” Tom Jalics said during the Greater Elkhart Chamber of Commerce Economic Update luncheon at Hotel Elkhart.
“I think the risks of a recession in the next 12 months are essentially a toss-up,” he said. “We’ve been saying this for quite a while, only based on the history.”
Jalics presented some of the indicators for whether a recession or slowdown in the economy could be on the horizon.
“There are four or five big measures of inflation and they’re all getting better,” he said. “Supply chain, money supply, commodities, inventories and housing. These are all disinflationary.”
He said many forecasters believe the economy has turned the corner on inflation, though the rate remains above the target level of 2%. How quickly it drops to that level could affect whether interest rates are increased.
“The good news here is that we feel very strongly that we’re past the worst of inflation. From here, the race will be how quickly does that green line get to the blue line,” he said. “The race to beat inflation is not yet won. It’s not over.”
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