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Buckle Up for a Bumpy 2024, Economists Say
Inflation, interest rates, tight housing supply, and an election year: Analysts are divided on which direction the economy will shake out this year.
Jan. 7.– The U.S. economy embarked on a rollercoaster ride in 2023, grappling with high inflation, soaring interest rates, wars abroad, and a shaky banking sector.
This time last year, the U.S. economy was bracing for an impending recession. Concerns about a recession persisted through 2023, particularly following the banking turmoil in the second quarter, which witnessed a 1930s-style bank run on Silicon Valley and First Republic Banks.
The Federal Reserve intervened with emergency measures, and as a result, bank liquidity recovered and financial and credit markets soon normalized, as if the crisis had never happened.
In the following months, the U.S. economy surpassed expectations and defied recession fears. The economy grew at a faster-than-expected 4.9 percent in the third quarter, boosted by strong consumer and government spending.
Currently, there’s growing talk about the prospect of a “soft landing” in 2024. Nevertheless, economists remain cautious, with many expecting a bumpy ride ahead due to the lingering effects of tight monetary policy over the past two years.
Recession Fears Not Over
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