The Fed is expected to launch its seventh interest rate hike this year in its meeting next month. Although inflationary pressure is easing, it is far beyond the Fed’s 2% target level. “We’re going to have more work to do, because we need to see inflation really on a sustainable downward path back to 2%,” said Cleveland Federal Reserve President Loretta Mester.
However, despite continued interest rate hikes, Goldman Sachs Chief Economist Jan Hatzius sees only a 35% chance of a recession next year against the consensus forecast of 65%. Goldman Sachs expects the U.S. GDP to rise by 1% in 2023 and a significant decline in U.S. inflation next year.
