US faces ‘L-shaped’ recession as Fed scrambles to tame inflation: analyst
The US economy will likely have to stay in recession for longer than anticipated in order to bring runaway inflation under control, according to a top analyst.
Zoltan Pozsar, the global head of short-term interest rate strategy at Credit Suisse Group AG, wrote a client note pushing back on widespread sentiment that the worst of inflation may be behind us and that the Federal Reserve will begin lowering interest rates.
Instead, the US may have to gird for a so-called “L-shaped” recession that will be deeper and longer than expected, according to Pozsar.
Pozsar cited the ongoing Russian invasion in Ukraine as well as disruptions to the supply chain exacerbated by intermittent COVID-related lockdowns in China.
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