The US economy is at a crossroads amid recession fears; one direction would result in slower, ongoing growth, while the other would result in a slight, transient recession, according to the University of California Los Angeles Anderson Forecast released Wednesday.

The forecast notes the Federal Reserve’s actions to control inflation will determine whether or not the economy enters a recession.

However, the estimate anticipates that the US will have a strong fourth quarter this year. The Anderson Forecast predicts that, in the event of a recession, the economy will shrink at an annual pace of 2% to 3% in the second and third quarters of next year, remain stable in the final three months of 2023 and begin to rebound in 2024.

In the recession scenario, consumption is anticipated to stagnate for the first two quarters of 2023 and then moderately decline for the following two.

Declining property prices would be a feature of both the recession and non-recession scenarios, with the recession scenario showing a slightly bigger fall. Through mid-2023, inflation in both cases decreases at roughly the same rate.

Overall, both scenarios project consumption growth for 2024.

According to the forecast, the lack of a recession will be partially due to supply chain pressures easing more swiftly and inflation falling more quickly on its own. A decrease in the supply of new houses would mitigate the decline in home prices in the case of a recession.