January 4, 2024
Economic Update January 2024
The U.S. economy is currently in an elongated late cycle that has experienced rolling recessions specific to certain sectors in economy such as real estate. The risk of a recession has decreased and the odds of a soft landing in the US economy have risen as the Federal Reserve’s (Fed) is ending its tightening cycle. The lag effects of monetary policy should continue to weigh on parts of the US economy this year. Higher rates for longer can weaken consumer demand, particularly if they persist. A weaker consumer can impact corporate revenue and the labor market. So far, the Fed has been fortunate with inflation trending lower and its restrictive monetary policy breaking economic growth without causing widespread damage to the US economy in the form of recession like six percent unemployment.