U.S. Will Avoid Recession, Some Wall Streeters Say

Not so fast, some analysts are saying. The U.S. may duck a recession.

Despite how many Americans are feeling when they go to the store or buy gas, some investors and economists are more optimistic about the country’s economic forecast.

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The investment bank Stifel, for instance, suggested in a note to clients that they shift from defensive investments to growth assets, predicting that oil prices will continue to decline, inflation will peak, and goods and energy costs will follow. Stifel analysts said they expect the Federal Reserve to stop hiking interest rates as inflation levels off, which will help avoid a recession. The fear has been that continued hikes, aimed at tamping down inflation, would set off a downturn.

"Recession fear is over-done, and we see no U.S. recession in six to nine months," the note said, according to Business Insider.

Sentiments at Credit Suisse are similar. Recessions require a drop in employment and "an inability of consumers and businesses to meet their financial obligations," Jonathan Golub, the bank’s Chief U.S. Market Strategist, said in a July note, adding "neither of the conditions are present today."

And, JPMorgan analysts seem to share the optimism. Bank analysts are confident in the economy's resilience, Jeremy Barnum, the bank's Chief Financial Officer, said in a call to reporters, according to Dealbook.

Morgan Stanley analysts said in a note that the economy will grow 2.9% through 2022 as hiring and spending stay strong. They had predicted a 36% chance of recession but couched their estimates with a nod toward the uncertain moment in which the forecast was made, "the most chaotic, hard-to-predict macroeconomic time in decades."