Michael M. Santiago Bank of America stated Wednesday that it believes the U.S. is headed towards a mild recession in 2023, driven by “weaker investment and consumer spending.” The firm also sees the unemployment rate ticking up to 5.5%. “We think the headwinds of a weaker labor market, higher borrowing costs, tighter credit standards, and weaker balance sheets will lead consumers to reduce spending temporarily and push the saving rate higher,” BofA said in a note to clients. BofA feels confident that markets will be forced to navigate their way through a restrictive monetary policy stance next year, which in turn will dampen consumer sentiment. On the inflation front, the bank projected that core CPI inflation will ease swiftly throughout 2023 as supply chain disruptions fix themselves, inventories improve and labor market conditions deteriorate. “Overall, we project the year-on -year rate of headline and core CPI to fall to 3.2% by 4Q 23.” In midday trading on Wednesday, the major averages (SP500), (DJI), (COMP.IND), and their mirroring ETFs (NYSEARCA:SPY), (NYSEARCA:VOO), (IVV), (NYSEARCA:DIA), and (NASDAQ:QQQ), have pushed higher ahead of the Thanksgiving holiday. BofA is not the only institution that foresees a recession. Russell Investments is another firm that is in the boat that believes the U.S. is headed towards a downturn.