An increasing number of economists — including the Federal Reserve’s own staff — are predicting the U.S. will escape a recession, though it’ll be well into 2024 before anyone can be sure of it.
Fed Chair Jerome Powell says he expects the central bank to navigate a path where the U.S. economy expands with inflation rates falling back to the 2% target, though the task will be challenging.
On one side, a failure to act aggressively enough against price pressures could result in rebounding inflation that requires harsher moves later. There’s also the risk that the lagged effects of what’s already the most aggressive tightening in four decades could tip the economy into recession.