Yingwei Finance Investing – Economists at JPMorgan Chase predict that the U.S. economy may enter a mild recession next year due to rate hikes, which could cost 1 million Americans their jobs, before the Fed could start cutting rates in 2024.
On Wednesday, JPMorgan economists Michael Feroli and Daniel Silver said in a research note that the Fed is likely to raise interest rates by 50 basis points in December and by 25 basis points at each of its first two meetings in 2023.
They said that U.S. inflation will gradually decline, and the Fed may start cutting interest rates at a rate of 0.5% per quarter in the second quarter of 2024, and reduce the federal funds rate to 3.5% by the end of 2024.
Weakness in the labor market will convince the Fed that they can start easing monetary policy toward a more neutral monetary policy, they said.
According to media surveys, economists predict that the probability of the US economy falling into recession in the next 12 months is 65%.
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(Editor: Chen Han)