The US economy could get hit in three ways if there's a recession, expert says

The chances of US going into recession by 2023 is more 50 per cent, said an expert from TD Securities.

According to Richard Kelly, head of global strategy at TD Securities, rising petrol prices combined with aggressive Fed policies and a slowing economy are among the three main risks.

The economy could slip into a technical recession towards the end of the year. Analysts will be closely watching the Bureau of Economic Analysis on July 28 for early estimates on that, he was stated as saying in a CNBC report.

“You really have three shots at a recession right now in the U. economy. We haven’t even hit the peak lags from gas prices, and Fed hikes really won’t hit until the end of this year. That’s where the peak drag is in the economy. I think that’s where the near-term risk for a US recession sits right now,” he further said

“Then, if you get past that, there’s the overall gradual slowing as we get into probably the middle or back half of 2023.”

According to the report, even if the US manages to overcome it, there will be a general slowdown.

Meanwhile, Goldman Sachs forecast a 30% chance of the US economy tipping into recession over the next year, up from 15% earlier, following record-high inflation and a weak macroeconomic backdrop due to the Ukraine conflict.

"We now see recession risk as higher and more front-loaded," Goldman economists said in a note on Monday.

The latest forecast comes about a week after the US Federal Reserve rolled out its biggest rate hike since 1994 to stem a surge in inflation and as several other central banks also took aggressive steps to tighten monetary policy.

"We are increasingly concerned that the Fed leadership has set a high and inflation-specific bar for slowing the pace of tightening," Goldman said.

(with inputs from Reuters)