The US should experience a “shallow recession” from the second to fourth quarters of 2023. The economic downturn has been pushed three months later than originally projected, and now see the Fed waiting longer before cutting interest rates, forecasting reductions of 25 basis points at both the November and December meetings next year.
See the Fed raising the target for its benchmark rate to a peak range of 5% to 5.25% by March via 50 basis-point increases at gatherings next month and in February, and a quarter-point hike in March.
Rates remain well above neutral through 2024, reflecting the committee’s intention to keep its monetary stance tighter for longer to manage risks of more-sustained inflationary pressures.
- Barclays
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