Market Extra: First major Wall Street bank to call for a recession now sees clear outside risk it could be `more severe’

26 April 2022

Deutsche Bank, the first major Wall Street bank to call for a U.S. recession during the current inflation era, is now going even further out on a limb: It sees downside risks to its own outlook, given the likelihood of persistently elevated price gains and continued upside surprises. Describing themselves as “the extreme outlier on the street,” researchers at the German-based bank have an official house call for a “mild” U.S. contraction by late next year, as the Fed pushes forward with hiking rates and shrinking its balance sheet to combat inflation — putting Deutsche Bank at the pessimistic end of 75 forecasters surveyed by Bloomberg.