A recession warning for 2022

Sizzling inflation, frazzled Americans, and an aggressive Fed walk into a bar —?and everyone and their uncles seem to have an opinion on what happens next.?

(Hint: Most of the punchlines aren't very funny.)

I'm Phil Rosen, and today I'm breaking down why one top Wall Street firm adjusted their economic forecast after yesterday's new inflation data, and is now expecting a?recession ?to hit sooner rather than later.

Plus, if you didn't see it yesterday, Insider is seeking nominations for its new series, 100 People Transforming Business —?take a gander .

Without a moment to spare…

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1. Bank of America said a mild US recession will arrive this year.?Americans are getting bogged down by a so-called "inflation tax ," analysts wrote in a Wednesday note, and it's weighing on spending power as?consumers spend less ?on goods and services.

Before yesterday, the bank had?predicted a growth recession , where the US would avoid an outright contraction of the economy. But BofA swiftly?adjusted course ?the same day new government data was published.?

Yesterday, June's consumer price index clocked in at?9.1% , above the expected 8.8%, and the bank said broader economic momentum is slowing as financial conditions tighten.

"The Fed has communicated its desire to restore price stability and a willingness to?accept at least some pain ?in labor markets in the process," BofA analysts wrote.?

But the slowdown isn't just coming for the US?— the IMF is gearing up to?slash ?its global growth forecasts for the?second time in three months ?as inflation, China's COVID lockdowns, and war in Ukraine hammer economies.?

In a Wednesday statement, the IMF's managing director,?Kristalina Georgieva , pointed to?worsening downside risks ?that have been exacerbated since the last G20 meeting in April.?

In her words: "It's going to be a tough 2022 — and?even possibly a tougher 2023 , with increased risk of recession."

In other news:

2. Top Wall Street firms agree that stocks are set to rally in the second half of the year, but their forecasts vary wildly.?JPMorgan, Goldman Sachs, Morgan Stanley, and others all have predictions for the rest of 2022. See what the heavyweights expect to happen next —?and how they say to invest .??

3. A blockchain founder who's nailed bitcoin's tops and bottoms just shared new price targets for it and ethereum.?He's advising to wait for the actual bottom, which could be much steeper than previous bear markets.?These are the four key things investors should know to navigate the digital asset winter.

4. US stocks?are trading at historically cheap prices, according to Morningstar,?and investors should be "adding judiciously" while they can get shares at a discount.?Here are the 33 best undervalued companies to buy in the second half of 2022.

5. Here's a look at the historic level the Consumer Price Index just hit on Wednesday.?It accelerated at its fastest rate since 1981, and the reading came in above expectations.?Read the full report on what the numbers tell us about the state of the economy.

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