US Federal Reserve Forecasts Three Interest Rate Decreases with Nominal Economic Downturn in 2024
25 December 2023 - 1011 views
The US Federal Reserve plans to lower interest rates three times in the coming year, according to a recent report. While the economy was robust in 2023, many remain concerned about high inflation, elevated mortgage rates, and student loan payments. Economists predict a slight downturn in 2024 but expect it to be relatively mild due to the financial position of households and some labor-hoarding effects among businesses.
[Deflationary Scenario]
[Significance: Medium]
1. The US economy was robust in 2023, but there is still gloom about the economy leading up to the 2024 presidential election.
2. Inflation has slowed significantly in 2023, falling from 6.3% in January to 3.1% in November.
3. Steady job growth and a spike in manufacturing investment have contributed to the decrease in inflation.
4. Mortgage rates remain elevated and student loan payments have restarted, causing financial strain for many.
5. Economists are predicting a relatively uneventful 2024 with GDP growth around or slightly above 2% as the economy enters a soft landing.
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