- The U.S. economy ended 2022 with strong Gross Domestic Product (GDP) growth but momentum appeared to be waning.
- 2023 promises more slow growth, with recession as a real possibility.
- We remain on recession watch as the Federal Reserve (Fed) continues its attack on inflation with higher interest rates and quantitative tightening.
- We are not forecasting a recession, but the alternative, a “soft landing,” will be difficult, though not impossible, to achieve.
- We expect the Fed to be successful in returning inflation to a low level, and sustainable GDP growth should approximate 2%.
- The transition back to more normal economic conditions is taking longer than expected, a testimony to the long-term damage of Covid and the response to it.