The Daily Money: 100% chance of a recession

Happy Friday! This is Swapna Venugopal Ramaswamy bringing you today’s top Daily Money headlines.

When it comes to financial news, two words we haven’t been able to escape this year are inflation and recession.

Inflation is a reality, but fears of recession have been on people’s minds.

Deutsche Bank sees a 100% probability the U.S. will have one. 

The short-term benchmark fed funds rate stands at the highest level since 2006, but inflation’s still twice the Fed’s goal. Fed Chairman Jerome Powell warned after the Fed’s policy committee meeting on Wednesday more rate hikes will likely be necessary to further cool inflation. 

But that, likely, will cause a recession, says David Folkerts-Landau, Deutsche Bank chief economist. 

“The U.S. is heading for its first genuine policy-led boom-bust cycle in at least four decades,” he writes. “The inflation we see was induced largely by expansive fiscal and monetary policy, and the aggressive rate hikes needed to tame that have now materialized. Avoiding a hard landing would be historically unprecedented.” 

Ironically, a recession may be something most prospective homebuyers want.

Buying a home has become so unaffordable that most prospective homebuyers wouldn’t mind a recession if it meant lower mortgage rates, according to a new survey.

Sixty four percent of Americans say they are “ready for a recession” if they are better able to afford buying a home, according to a study conducted by Harris Poll on behalf of Credit Karma, designed exclusively for Paste BN.

Not surprisingly, 82% of those surveyed believe the country is facing an unprecedented housing affordability crisis.

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Each weekday, The Daily Money delivers the best consumer news from Paste BN. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.