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.
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.
The higher interest rates will lead to sharply weaker growth in consumption and investment spending.
Fiscal deficits are set to decline throughout 2025. This is partly due to waning government financial assistance as the pandemic winds down.
Ongoing labour shortages and the trend toward deglobalization could leave inflation rising above the 2.0 per cent target over the medium term.
There are no reviews yet.