U.S. Outlook

20-Year Outlook By CBoC Economics Team • Updated November 8, 2022

Agonizingly Slow Drop in Inflation

The U.S. economy contracted slightly in the first two quarters of this year, mainly because of volatility in inventories and rising imports. At the same time, labour markets have remained strong. This suggests that, despite the two consecutive quarters of negative growth, the economy isn’t currently in a recession.

November 8, 2022 • 8-min read

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Key Findings

Inflation in the U.S. Has Likely Peaked

Inflation in the U.S. has likely peaked, but the decline has been tepid. We don’t expect price increases to return to the Federal Reserve’s 2.0 per cent target until late 2023.

Fiscal Deficits Are Set To Decline

Fiscal deficits are set to decline throughout 2025. This is partly due to waning government financial assistance as the pandemic winds down.

Inflation Rising Above the 2.0 per Cent Target

Ongoing labour shortages and the trend toward deglobalization could leave inflation rising above the 2.0 per cent target over the medium term.

Higher Interest Rates

Economic growth in the U.S. economy will decelerate to a gain of only 1.3 per cent in 2023, mainly because of the higher interest rates required to slow down inflation.

Product Name Outlooks

Previous Release

Price Watch: U.S. Outlook to 2026

Is the U.S. economy about to slip into recession over the near term? The signs are certainly ominous, as stock markets have been trending downward and consumer confidence has slipped over the past few months. The Federal Reserve (Fed) is determined to bring inflation back down from current levels of around 8.0 per cent to its target of 2.0 per cent and has started to aggressively increase the key federal funds rate.

August 26, 2022 • 20-min read

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