Chapman Forecast: More Growth in 2022; Recession in 2023?

My Epoch Times article

Despite problems with the supply chain and inflation, the recovery from the brief COVID-19 recession of 2020 should continue. That’s according to the recent forecast given by Jim Doti, Chapman University president emeritus and economics professor, at the Musco Center for the Arts on the school’s Orange, California, campus.

Doti first joked about being kind of like Usain Bolt in winning the October 10 Chicago Marathon—for the 75 to 79 age group.

Then he noted that Chapman’s forecast from a year ago was once again the most accurate in the nation, with a spot-on prediction of 5.7 percent real gross domestic product (GDP) growth for 2021. An average of other forecasts came in at just 4.2 percent. Two other such forecasts came from Wells Fargo at 4.8 percent and UCLA at 3.6 percent.

Chapman’s expectation for 2022 is a little more modest at 4.4 percent, but that’s still “gangbusters,” according to Doti.

Of course, the main worry now is inflation. Chapman expects it to rise to 6.3 percent in the second quarter of 2022. What will the Federal Reserve Board do about it? Its weapon of choice is raising interest rates: It’s just a question of how much.

The Fed Funds Rate is expected to rise from 0.08 percent today (essentially 0 percent), to 1 percent by yearend 2022, with further increases anticipated to come in 2023. The increases won’t much perturb 2022 GDP growth because the aggressive COVID-19-era monetary growth, although halted, will still carry momentum.

However, by 2023, the chances of a recession hitting will be fairly high. Similar increases in interest rates caused the recessions of the early 1990s, the dot-com bust of 2000, and the deep sub-prime recession of 2007 to 2009.

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https://www.theepochtimes.com/chapman-forecast-more-growth-in-2022-recession-in-2023_4164188.html