Economists have boosted their U.S. inflation forecasts — again — and downgraded expectations for economic growth through most of 2023, underscoring growing risks to the outlook as the Federal Reserve tries to curb the fastest price growth in decades.
The consumer price index will now average 5.7% in the final three months of the year, up from the 4.5% estimated a month ago, according to the median forecast of 72 economists in a Bloomberg survey. The chance of a recession over the next year also increased to 27.5% from 20% in March. The March CPI report will be released Tuesday.
The survey, conducted April 1 to 7, captures economists’ forecasts after the first full month of Russia’s war in Ukraine, which has driven up prices of major commodities like food and oil and stressed fragile supply chains. That’s bolstering expectations for rapid inflation to persist and consumer spending to slow, complicating the Fed’s task to tame prices without tipping the economy into a recession.
