The Federal Reserve is done raising interest rates and will likely cut them by roughly one percentage point next year, according to chief economists at some of North America’s largest banks.
While the US will probably dodge a recession, economic growth looks set to slow markedly in the coming quarters, pushing up unemployment while reducing inflation, the latest forecast from the American Bankers Association’s Economic Advisory Committee shows.
The US central bank is widely expected to hold rates steady at its meeting next week, though investors are divided over whether it will follow that up with a rate increase later in the year. The committee sees economic growth slowing to less than an annualized 1% rate in the coming three quarters in response to the Fed’s past interest-rate increases and a tightening of credit conditions, according to their median forecast.
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