Looking back to our Economic Outlook for 2023, “soft landing” was the term many hoped we’d see. By most accounts, we have exceeded that goal. Unemployment remains low, the stock market is booming and the GDP has impressed. Despite the comeback and the U.S. economy being the “envy” of the world, the mood of the nation still feels the effects of inflation and the high cost of housing. The interest rate balancing act may be the next in the spotlight — while lowering them would be great to get projects flowing, it could also drive inflation higher. So what do the experts have to say?
Josh Lehrner, economist for the Oregon Office of Economic Analysis states, “Looking ahead, expectations are for the economy to remain cyclically strong with low unemployment, and household income growth outpacing inflation. And while the Fed will adjust policy based on the state of the economy, threading the needle may be challenging this year. Should the Fed cut rates too quickly or deeply, it may spur stronger economic growth and a rebound in inflation. However, should the Fed not cut rates quickly or deeply enough, it would leave interest rates too high for the economy and could choke off growth.”
If the Fed can get this balancing act right, it could be a bounce-back year!
Thank you to all of our contributors. You can read their insights on pages 9-22 in the current February 7 CBN.
Cheers to 2024!
