Fed Action Signals Likely Recession in Q4 2022

October Economic Outlook

The U.S. Federal Reserve’s aggressive monetary policy, tightening financial conditions, and a cooling labor market lead experts to believe a recession is likely. While a recession could come to fruition as soon as the Q4 calendar year 2022, businesses must prepare for multiple market scenarios in 2023.

Inflation is decreasing as the Federal Reserve continues with strict policies. Even with inflation cooling down due to swelling inventories and reducing labor shortages, higher consumer prices are suppressing demand. The Federal Reserve’s efforts to curb inflation by implementing the most quantitative tightening policies in decades show their willingness to accept the risk of a recession.

The report dives into the following impacts:

  • Excess Inventories
    • Positive: manufacturers and retailers can fulfill their orders
    • Negative: additional pressure to clear out supply
  • Excess Worker Supply
    • Positive: affordable labor increases business growth
    • Negative: signal of a potential recession
  • The Federal Reserve’s Tight Policies
    • Positive: combating inflation
    • Negative: credit is less available and more expensive for consumers and businesses

What does this all mean for U.S. businesses? View the most recent analysis from Prevedere’s Principal Economist Michelle Green to find out.

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About Prevedere, Inc.
Prevedere is the world’s leading provider of predictive analytics technology and solutions based on econometric modeling, enabling intelligent enterprises to understand and quantify the impact of external factors as part of their strategic planning and forecasting. Our global data repository and patented AI platform enable financial executives and operational planners to identify market drivers, quantify the future impact of economic volatility, generate performance forecasts, and optimize plans based on market foresight.

Prevedere’s automated AI model monitoring provides an early warning system when unplanned market shifts and anomalies are predicted, enabling planners to future proof business performance. Many of the world’s leading consumer packaged goods, retail, logistics, and manufacturing companies leverage Prevedere to generate economic intelligence, spot market opportunities, mitigate risks, and deliver exclusive competitive advantage.

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