New York
CNN Business
—
Stubborn inflation and the Federal Reserve’s jumbo-sized interest rate hikes will drive the American economy into a 1990-style mild recession starting in the spring, Fitch Ratings warned on Tuesday.
In a report obtained first by CNN, Fitch slashed its US growth forecasts for this year and next because of one of the most aggressive inflation-fighting campaigns by the Fed in history. US GDP is now expected to grow by just 0.5% next year, down from 1.5% in the firm’s June forecast.
High inflation will “prove too much of a drain” on household income next year, Fitch said, shrinking consumer spending to the point that it causes a downturn during the second quarter of 2023.
The gloomy forecast adds to the growing fear among investors, economists and business leaders that the world’s largest economy…
