Deutsche Bank’s economists have warned that the U.S. will suffer a major recession next year. However, several other major investment banks, including Goldman Sachs and JPMorgan, are less pessimistic about the future outlook for the U.S. economy.

Major US Recession Incoming, According to Deutsche Bank’s Economists

Deutsche Bank has predicted a deeper downturn than its previous forecast for the U.S. economy in a report to clients, published Tuesday.

The bank’s economists, including David Folkerts-Landau, group chief economist and head of research, explained in the report why the coming recession will be worse than expected. They described:

We will get a major recession, but our strongly held view is that the sooner and the more aggressively the Fed acts, the less longer-term damage to the economy there will be.

The report explains that it will take a long time before inflation falls back to the Fed’s goal of 2%. The authors warned that the central bank will likely engage in the most aggressive monetary tightening since the 1980s, which “will push the economy into a significant recession by late next year.”

The Deutsche Bank economists detailed: “We assume conservatively that a Fed funds rate moving well into the 5% to 6% range will be sufficient to do the job this time … This is partly because the monetary-tightening process will be bolstered by Fed balance-sheet reduction.”

Several other major investment banks, however, are less pessimistic than Deutsche Bank.

Goldman Sachs recently estimated there is a 35% chance of a recession in the next two years. While admitting that it will be very challenging to bring down high inflation, Goldman’s economists wrote in a report Friday:

We do not need a recession but probably do need growth to slow to a somewhat below-potential pace, a path that raises recession risk.

Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a report on Monday: “Inflation should ease from current levels, and we do not expect a recession from rising interest rates.”

Jacob Manoukian, JPMorgan’s head of investment strategy in the U.S., said this month that a recession in the near term is possible but not probable. Meanwhile, Bank of America chief investment strategist Michael Hartnett warned earlier this month that a “recession shock” is coming.

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