- The greatest risk is not the risk of recession, but the risk of persistently high inflation – Natixis
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The greatest risk is not the risk of recession, but the risk of persistently high inflation – Natixis
In the United States and the Eurozone, economies are protected against the risk of recession by several mechanisms. The risk of persistently high inflation is therefore greater than the risk of recession, analysts at Natixis report.
The US and Eurozone are actually protected against the risk of recession
Many mechanisms are protecting the US and the Eurozone against the risk of recession: strong job creation, high corporate profitability, the fall in the household savings rate in the United States, government programmes to support investment and the energy transition.
As a result, the major risk in the US and the Eurozone is not the risk of recession, but the risk of persistently high inflation, caused by the tightness of the labour market, which is rapidly pushing up wages, and by the lack of productivity gains.
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