The Fed raised interest rates six times this year to bring the multi-decade-high inflation down to its target 2% level. The aggressive rate hikes have raised the odds of a recession. Along with raising interest rates by 75-basis-point for the fourth consecutive time earlier this month, the central bank hinted at continuing with rate hikes, albeit at a lower rate.
However, the U.S. economy witnessed an annual GDP growth rate of 2.6% in the third quarter of 2022, marking a sharp turnaround after the contraction for two consecutive quarters. Furthermore, Goldman Sachs Group Inc.’s top economist sees a significant chance for the economy to avoid a recession despite the Fed’s policy tightening and geopolitical uncertainties.
