Even Wall Street has no clue which way the economy is going

• At the start of the year, most forecasters predicted an economic slump.
• But better-than-expected data has caused a number of analysts to shelve their recession predictions.
• Wall Street hasn't been so divided for two decades, according to Bloomberg.

Nobody seems to have any idea what's going to happen to the US economy over the second half of 2023.

President Joe Biden has shrugged off the idea that there'll be a recession – but his own Treasury Secretary, Janet Yellen, isn't so sure.

Similarly, the Federal Reserve's own forecasters say it's a 50-50 call whether the US will manage to escape a severe economic slump.

And you can add Wall Street to the list of places where there's limited agreement on if there'll be a recession before the end of this year.

At the start of 2023, there was a consensus among most analysts that the Fed's aggressive interest-rate hikes – brought in a bid to tame soaring inflation – would lead to a major slowdown in spending that would drag growth into negative territory.

Six months into the year, that hasn't happened – with inflation cooling, unemployment holding steady, and GDP still rising in what some see as a dream economic scenario.

Bank of America responded by shelving the recession call it made at the start of the year, while Goldman Sachs economists say there's now just a 25% chance of a severe slump, thanks to Congress's debt-ceiling deal and the end of the regional banking crisis.

But for every optimistic voice, there's someone like Morgan Stanley's top US strategist Mike Wilson, a well-known Wall Street bear who still believes that high-flying tech companies will see their profits plunge as growth slows over the second half of the year.

Another top bank that's still among the doomsayers is JPMorgan, whose economists said last month that the rapid pace of Fed tightening means that there's just a 23% chance the US avoids a recession.

The range of views on Wall Street is so wide that when it comes to stocks, analysts haven't been so divided for 20 years, according to Bloomberg.

The outlet surveyed strategists' end-of-year S&P 500 calls and found there's nearly a 50% gap between the most bullish and most bearish names, the largest divergence since 2003.