Although the Federal Reserve broke a string of four straight 75 basis point hikes by announcing a 50-basis-point hike last week, the officials signaled plans to keep raising rates through next year, with no reductions until 2024. Based on its median forecast, the terminal rate is projected to reach as high as 5.1% in 2023.
Furthermore, retail sales and industrial production declined in November, showing signs of a slowing economy and increasing the likelihood of the economy tipping into a recession. Retail sales fell 0.6% from the previous month, recording the biggest decline this year, while manufacturing output fell 0.6%, the first decline since June.
