The July 2022 Wall Street Journal Economic Forecast Survey was published on July 17, 2022. The headline is “As Fed Tightens, Economists Worry It Will Go Too Far.”
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the forecasts section.
An excerpt:
Economists increasingly expect the Federal Reserve, in its efforts to push down inflation, to raise rates enough to trigger a recession, with many worrying the central bank will go too far.
Economists surveyed by The Wall Street Journal now put the chance of a recession sometime in the next 12 months at 49% in July, on average, up from 44% a month ago and just 18% in January.
Some 46% of economists said they expect the Fed to raise interest rates excessively and cause unnecessary economic weakness. Slightly fewer, 42%, said they anticipated the Fed increasing rates about the right amount to balance inflation and growth. Around 12.3% thought it would raise rates too little.
As noted above, and also seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 49%. The individual estimates, of those who responded, ranged from 1% to 99%. For reference, the average response in June’s survey [the previously published survey] was 44%.
As stated in the article, the survey’s 62 respondents were academic, financial and business economists. The survey was conducted July 8 – July 12. Not every economist answered every question.
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Economic Forecasts
The current average forecasts among economists polled include the following:
GDP:
full-year 2022: .71%
full-year 2023: 1.14%
full-year 2024: 2.05%
Unemployment Rate:
December 2022: 3.76%
December 2023: 4.28%
December 2024: 4.35%
10-Year Treasury Yield:
December 2022: 3.32%
December 2023: 3.22%
December 2024: 3.17%
CPI:
December 2022: 6.85%
December 2023: 2.93%
December 2024: 2.31%
Core PCE:
full-year 2022: 4.47%
full-year 2023: 2.93%
full-year 2024: 2.32%
(note: I have highlighted this WSJ Economic Forecast survey each time it is published; it was published monthly until April 2021, after which the survey is conducted (at least) every three months; commentary on past surveys can be found under the “Economic Forecasts” category)
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I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3863.16 as this post is written