The US has a 100% chance of tipping into recession within 12 months, a statistical model shows

• There's now a 100% chance the US economy will enter recession within a year, Bloomberg Economics said. 
• Its forecast comes as tight monetary policy, inflation and growing geopolitical tensions squeeze the economy. 
• The Biden administration has played down growing gloomy warnings ahead of midterm elections in November.

There's a 100% chance the US economy will tip into a recession within 12 months, a statistical analysis by Bloomberg Economics has found. 

It's almost a sure thing that a sustained and severe slowdown will hit the US by October 2023, the report Monday said. Its last modeling found 65% odds of a recession in the same period, a sign that pressures are building.

The forecast comes as the economy is squeezed by a combination of inflation at 40-year highs, big interest-rate hikes and growing geopolitical tensions.

Leading investors like Bill Ackman have flagged the risk of a US recession next year, pointing to pressures such as the impact of rising interest rates on mortgages — though none have called it a certainty.

But the Biden administration has played down the gloomy warnings, looking to take an upbeat tone in the runup to crucial midterm elections in November. President Joe Biden hopes to reassure Americans that the economy is being well managed.

"The economy is strong as hell," Biden said on the campaign trail this weekend, media reports said.

Investors are watching to see whether the Fed will hit the economy too hard with the series of aggressive rate hikes it's using to cool red-hot inflation. It's lifted the benchmark rate to a range of 3% to 3.25% and has signaled further increases to come.

Bloomberg's recession probabliity model — which uses 13 macroeconomic and financial indicators — laid out an increase in odds of a recession hitting in a shorter timeframe. It found a 73% chance of an economic downturn within 11 months and a 25% probability within 10 months.