Chances of 'no landing' grows by the day: Bank of America
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Bank of America economists predict increasing chances of a 'no landing' scenario for the US economy, where it avoids recession and significant slowdown. They attribute this to factors such as strong growth in the labor force, catch-up effect in employment, supportive fiscal policies, and domestic manufacturing investment. However, they expect the tailwind from these forces to gradually fade, leading to a slowdown in real GDP growth from 3.1% in 2023 to 2.1% in 2024, 2.0% in 2025, and 1.8% in 2026. The bank also foresees moderately restrictive financial conditions, tighter bank lending standards, diminishing wealth effects, and a strong dollar. Despite the projected slowdown, economists believe the unemployment rate will remain low, with risks in both directions. BofA expects inflation to decelerate but remain sticky due to slow decline in services inflation. They anticipate the Federal Reserve to begin cutting rates in December quarterly to a terminal of 3.5-3.75% in 2026, with the main risk being inflation remaining sticky enough to keep the Fed on hold for longer than expected.

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https://www.investing.com/news/economy/chances-of-no-landing-grows-by-the-day-bank-of-america-3491791