Our US Chart Pack has been updated with the latest data and our analysis of recent developments.
We still think the economy is more likely than not to fall into a mild recession later this year, as higher interest rates remain a drag and credit conditions continue to tighten. With the labour market proving resilient and core inflation still much too high, we expect the Fed to hike rates by a final 25bp at the late-July FOMC meeting, taking the fed funds target to a peak of 5.25%-5.50%, and don’t expect rates to be cut again until next year. But as the economy weakens and the downward trend in core inflation gathers pace, we think rates will eventually fall back more quickly than markets are now pricing in.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services