Economic outlook for 2024 Wayne Duggan Farran Powell BLUEPRINT Updated 8:33 a.m. UTC Nov. 15, 2023
Key Points
Americans are hopeful the Federal Reserve can achieve a so-called soft landing for the U.S. economy in 2024.
The Fed projects U.S. GDP growth of 1.5% next year.
Inflation is trending steadily lower but will likely remain above 2% in 2024.
The Federal Reserve has made significant progress in bringing down inflation while maintaining growth in the U.S. economy in 2023. However, while inflation has trended lower recently, interest rates are historically high. Economists anticipate the economic fallout from the Fed’s tight monetary policy measures may intensify in 2024.
Investors are hopeful the Fed will be able to navigate a so-called soft landing for the U.S. economy and avoid a severe recession in 2024. Unfortunately, inflation remains well above the Fed’s 2% long-term target, and experts are divided on whether the Federal Reserve may have simply delayed an inevitable recession.
The Federal Reserve itself projects its monetary policy tightening measures will weigh on U.S. economic growth in 2024.
Fortunately, the Fed recently modified its economic projections and no longer anticipates a U.S. recession. While the risk of a severe recession has declined in 2023, economists and analysts anticipate interest rates will remain higher for longer than optimistic Americans had hoped.
Investors looking ahead to 2024 should consider taking a cautious approach to their finances given the potential for a slowdown in gross domestic product growth, sticky inflation and a delayed negative economic impact from the Fed’s aggressive rate hikes.