The last year was loaded with concerns over the stubbornly high inflation, aggressive interest rate hikes, and the possibility of a recession. Fed officials signaled at their December meeting that economic growth would slow sharply in 2023, and unemployment would march substantially higher to a rate of 4.6%.
However, the cooling inflation, as evident from the lower-than-expected inflation data in October and November 2022, could boost the odds of a soft landing. Goldman Sachs bets that the U.S. economy will avoid a recession and move towards a ‘soft landing’ where inflation moderates but growth continues.
