Analysts at Deutsche Bank predict the onset of a recession in the U.S. by mid-2023, when major stock indexes will fall 25% from levels slightly above today’s levels, Yahoo writes.

Analysts also said earnings per share in the S&P 500 index would fall from $222 in 2022 to $195 in 2023.

With its actions to combat rampant inflation, the Fed will continue to tighten and eventually plunge the economy into recession next year. However, the bank’s forecast does not look pessimistic at the same time, as the Fed rate hike will be followed by a market recovery by the end of 2023.

“We expect the major stock indices to fall 25% from levels slightly above today when the U.S. enters recession, but then fully recover by the end of 2023, assuming the recession lasts only a few quarters.”

David Folkerts-Landau, chief economist at Deutsche Bank. wrote that in the U.S., the S&P 500 is expected to rise to 4,500 points in the first half of next year, then fall more than 25 percent in the third quarter before recovering again to 4,500 points by the end of 2023.