The Richcession Keeps Rolling

[marble falls]

2. The Fed now predicts a soft landing and no recession

The Fed now predicts a soft landing and no recession
In their June forecasts, Fed officials said they expect the unemployment rate to rise only slightly to 4.1%
By
Nate DiCamillo
PublishedJune 14, 2023


The Federal Reserve changed its mind about the potential for the US to experience a soft landing.

https://qz.com/fed-predicts-no-recession-june-forecast-1850540067

In their summary of economic projections, Fed officials signaled on Wednesday (June 14) that they think the US won’t hit a recession this year, as they decided not to raise rates in June. The summary also says inflation will end up being higher than what officials first guessed in March.

Previously, Fed officials were predicting that the unemployment would rise to 4.6% from 3.5%. In the eyes of some economists, a rise in the unemployment rate of more than 1% was seen as the Fed essentially trying to engineer a recession to bring down inflation.

Those same officials now predict that the unemployment rate will rise to only 4.1% (from the current 3.7%) by the end of the year.

The officials also more than doubled their median forecast for gross domestic product in the US, projecting that it will move up by 1% instead of 0.4% this year.

The median projection is for overall inflation (as measured by the personal consumption expenditure index) to fall to 3.2% from the 4.4% it was in April.

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