Is the U.S. Economy In Recession? What the Fed—and Everyone Else—Got Wrong.

It was roughly a year ago, after the Russian invasion of Ukraine caused an oil-price shock and the Federal Reserve kicked off its interest-rate-tightening campaign, that forecasters began warning in earnest that the U.S. economy was on the brink of a steep downturn.

In March 2022, Goldman Sachs economists published an economic forecast reflecting a 20% to 35% chance of an economic contraction within 12 months. By June, JPMorgan Chase CEO Jamie Dimon was bracing for an economic “hurricane,” and the following month, the team at Bank of America predicted a mild recession would hit before the year’s close. In September, policy makers at the Fed forecast economic growth of an anemic 0.2% for the year.