The economy expanded 2.9% on an annualized basis in the fourth quarter of 2022, following an increase of 3.2% during the third quarter. While there were increases in inventory investment and consumer spending, residential and non-residential investments softened due to high-interest rates.
The Federal Reserve recently raised its benchmark interest rate by 25 basis points, taking the target range to 4.5%-4.75%, the highest since October 2027. Despite inflation showing signs of moderating, the Fed signaled more rate hikes ahead to bring down inflation to its 2% target.
