As of November 2023, the U.S. economy, despite facing 525 bps of rate hikes by the Federal Open Market Committee (FOMC) since March 2022, appears resilient. Consumer spending strength counters the challenges. Although inflation is easing, the battle against it isn’t conclusively won.
Despite these efforts, cracks in the economy are surfacing, likely intensifying due to ongoing monetary restraint. Our projection anticipates a modest contraction in real GDP from mid-2024 onwards.
We predict the FOMC will cut its target federal funds rate range by 225 bps by early 2025, surpassing current expectations. Even with a potential “soft landing,” 2024’s real GDP growth may be subpar due to elevated real interest rates combating inflation.
Regional disparities persist, with the Sun Belt and Mountain West outperforming the Northeast and Midwest. In the commercial real estate market, storm clouds hover over the office and multifamily sectors, while the retail and industrial sectors showcase stronger fundamentals.
Globally, 2024’s economic climate may face challenges, particularly impacting the Eurozone and the United Kingdom. China’s economy might continue grappling with growth headwinds, while India’s outlook remains relatively sunny.
Expect the U.S. dollar to stay strong against most foreign currencies in early 2024, eventually shifting to weakness as the Fed eases monetary policy later in the year.
Conclusion:
While uncertainties linger, understanding these economic indicators can help navigate the challenges and opportunities in the coming year. For more insights and guidance, consider reaching out to the experts at 4xPip, a leading platform in providing tools and information for traders. Don’t miss out on their expert advice and innovative trading products. Contact 4xPip’s customer support at [email protected] to learn more.
