- According to the federal funds futures market, market participants expect the Fed to raise short-term rates to about 3% by early 2023 and then take a pause.
- The fiscal stimulus is not being repeated and the Fed has just commenced to shrink its balance sheet, which means it will no longer purchase large quantities of U.S. Treasury and Mortgage-Backed securities each month.
- The bottom line is that U.S. growth is certainly slowing back to trend growth after the rapid rebound from the pandemic shock, but that does not necessarily mean a recession is around the corner.
For further details see:
5 Recession Risk Factors To Watch