(Reuters) – The U.S. economy is at risk of shrinking in the second quarter, BofA Global Research wrote in a client note, following recent economic data that hinted that the Federal Reserve’s aggressive interest rate hikes were cooling the economy.
“This week’s data flow is consistent with our view that the U.S. economy slowed steadily over the course of 1Q 2023,” BofA economists wrote in a note dated Friday and emailed Monday. “As a result, the hand-off to 2Q looks weak. We see meaningful risks of a contraction in GDP in 2Q.”
BofA pointed to data from April 3 showing U.S. manufacturing activity slumped in March to the lowest level in nearly three years as new orders plunged.
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