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Global economy may avoid a recession – JPMorgan Chase

American financial giant JPMorgan Chase and Co based in New York City on Monday said that possibility of a recession in the global economy is coming down.

The easing of inflation in the major economies and metrics related to labour and unemployment is pointing towards a potential soft landing for the global economy.

According to JPMorgan Chase data on moderating inflation and wage pressures from major economies shows stabilizing consumer confidence in the markets.

A few weeks ago various economic institutions and financial services institutions had predicted a severe recession in the European Union. Heightening inflation rates in Europe and strict policy initiatives introduced by European Central Bank (ECB) regarding interest rate hikes are stated as the main reason for the possible recession in Europe.

The latest note from JPMorgan Chase predicts a different picture of the economy in Europe. The multinational investment bank expects European governments to take strict measures which will shield their citizens from the extreme impacts of energy inflation.

The largest economy in Europe Germany has been one of the worst affected countries in the continent. Germany has been seeing high inflation rates and after-effects of interest rate hikes in its economy for the past few months.

Increasing prices of natural gas and oil along with subsequent price hikes in the food and beverage sector are said to be the major factors for high inflation rates in European countries.

Russian special military operation in Ukraine had resulted in price hikes of essential commodities all around the world. The United States of America which is the largest economy in the world witnessed inflation rates which were standing at a 40-year-high rate.

Europe also suffered from severe inflation as oil and gas prices skyrocketed. Even though oil prices eased down from 150 dollars per barrel to $90 per barrel the demand for gas and oil in the European Union continues to increase as the winter is nearing.

On the other side of the Atlantic, the United States Federal Reserve, which is a Central Bank of the country, has been using all kinds of monetary policy tools to bring inflation rates in the country below the benchmark level. The inflation rate which is set by Federal Reserve is 2 per cent or less. The current inflation rates are currently standing nearly 4 times more than the allowed limit.

Statistics of us labour Department from August suggest that consumer prices have not risen in much in July as cost of gas has come down.