Three former top officials at the U.S. Federal Reserve, including Donald Kohn, tell Jon Hilsenrath that the chances of a double-dip recession have risen to between 20% and 40%.
Economists at Bank of America’s Merrill Lynch said Thursday that the economy is just one shock away from a recession. They put the probability of a recession in the next 12 months at 35%. However, they said the likelihood that the economy is currently in a recession was just 10%.
Even if we avoid a formal recession, they said, “it will still feel like a recession to many.”
Other economists have also weighed in. Former White House economic adviser Larry Summers said earlier this week that the odds of a new recession were 33%. Former top Fed officials told the Wall Street Journal’s Jon Hilsenrath that the odds were between 20% and 40%. Charles Dumas, an economist for London-based Lombard Street Research, said the chances of a recession next year are 50%.
“The economy has already been hit by a series of sucker punches earlier, this year including the jump in oil prices from the Middle East crisis, the collapse in auto production from the Japanese tsunami, and the confidence hit from the fiscal crisis in Europe and the U.S.,” wrote Merrill economist Michelle Meyer.