Wall Street's first major bank! Bank of America follows closely behind the Federal Reserve and officially announces that it expects the United States to avoid a recession.

After the Federal Reserve's interest rate meeting last week, Fed Chairman Powell stated that the institution no longer predicts a recession in the US economy. A week later, on Wednesday, August 2nd, one of Wall Street's major banks, Bank of America, released a report stating that the US economy is expected to avoid a recession, and a "soft landing" is the most likely outcome. As a result, Bank of America became the first major Wall Street bank to officially change its economic forecast in light of the increasingly optimistic economic outlook. The Bank of America team, led by Michael Gapen, believes: Recent data has prompted us to reassess our previous view that the US economy is most likely to experience a mild recession in 2024. Over the past three quarters, the US economy has averaged a growth rate of 2.3%. The unemployment rate remains near historic lows, and wage and price pressures are moving in the right direction, albeit gradually. In addition to raising their forecasts for US GDP growth in the next two years, Bank of America economists have also changed their expectations for when and how the Federal Reserve will cut interest rates. The bank's economists now believe that the Fed will start cutting rates in June of next year, and the rate-cutting process will be gradual. In July, Goldman Sachs' Chief Economist, Jan Hatzius, lowered the probability of a US economic recession in the next 12 months from 25% to 20%. Hatzius' view is similar to Gapen's, suggesting that the next phase of the US economy will be "unremarkable growth." Even manufacturing companies like Caterpillar have stated that business conditions are better than initially feared. Over the past year, while individual economists, including those from Morgan Stanley and Goldman Sachs, have consistently believed that the US will avoid a recession despite rising interest rates, most bank economists have believed that a recession in the US economy is difficult to avoid. However, the "recession camp" is showing signs of loosening. In addition to Bank of America changing its stance, a recent survey shows that the majority of people now believe that the likelihood of a US recession in the next 12 months is 50% or lower. Cleveland Fed President Loretta Mester recently stated that local businesses have gained more confidence in avoiding a recession: At the end of 2022, many of our business contacts told us that they expected the economy to enter a recession in 2023. Now, most people believe that there will be no economic recession this year. A key pillar of the US economy and its resilience is a strong labor market. Low unemployment, stable employment, and steady wage growth provide American households with the funds for sustained consumption. Unlike Bank of America, many other Wall Street economists who have long predicted an economic recession are not yet ready to change their stance. Many economists believe that the US economy has not yet emerged from its challenges—the cumulative impact of Fed rate hikes has not fully materialized. Although inflation has eased, the ongoing resilience of the labor market and consumer spending may slow the pace of inflation decline, leading the Fed to further raise interest rates. Fitch Ratings downgraded the sovereign credit rating of the United States on Tuesday. The agency believes that given the tax cuts, new spending plans, economic shocks, and the recurring political deadlock over the debt ceiling, the country's fiscal situation may deteriorate over the next three years. The Bloomberg Economic Research Institute still predicts that the US economy will enter a recession in the fourth quarter of this year or early 2024. In order to abandon this forecast, the institute believes that it is necessary to see relaxed credit conditions without a significant increase in bad debts, as well as the private sector accepting conditions such as "Bidenomics".