Add another prominent voice in the field of economics warning about a looming recession.
"I would say that it's probably closer to a coin toss that the economy will be moving into recession by the end of the year," said Dreyfus and Mellon Chief economist and macro strategist Vince Reinhart on Yahoo Finance Live.
Reinhart's comments come amid multiple negative forces playing out in the economy.
The Consumer Price Index (CPI) rose by 7.9% in February, marking the fastest pace of annual inflation in 40 years amid a push higher in rent, food and used car prices. On Tuesday, the CPI could show an increase north of 8% on the headline for March as Yahoo Finance's Alexandra Semenova reports.
Meanwhile, the Personal Consumption Expenditures index (PCE) rose 6.4% in February, accelerating from a 6.1% increase in January.
It represented the fastest rate of inflation since 1982.
Hot reads on inflation in recent weeks has prompted more hawkish talk on interest rate increases from Fed members such as Lael Brainard. That tough talk on inflation fighting could continue this week as Brainard and other closely watched Fed members speak at various events.
Given high levels of inflation and rising rates — which has sent the 30-year mortgage ballooning to 5% — many economists are warning of an impending recession by sometime in 2023. Deutsche Bank's Matthew Luzzetti became the first economist from a major investment to call a recession a week ago.
He isn't alone.
"When we think of a mild recession I think the best example is probably what happened in 2021, maybe a 2 percentage point increase in the unemployment rate, a couple of quarters of weak GDP growth," Dent said. "In terms of time willing, we are most concerned about potentially 2024. We think that the cumulative risk of a recession between now and the end of 2024 stands at about 35% to 40%. A lot of that is just coming from what we think is going to be this very aggressive response from the Fed to actually get inflation under control and make sure the labor market actually cools down," said Nomura Chief U.S. economist Robert Dent on Yahoo Finance Live.
Added Dent, "We would largely agree that the inflation situation facing the Fed is quite a conundrum for them, and it will be difficult to navigate."
For his part, Reinhart is expecting three, 50 basis point rate hikes from the Fed soon.
Explained Reinhart, "The yield curve is inverted by many measures. Oil prices are considerably higher. The Fed is tightening. We are getting closer to full employment. Trees don't grow to the sky. I think if you are looking over the next year and a half or so, you should think of a recession easily as a coin toss."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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