JP Morgan’s 2024 US Economic Outlook: Federal Reserve to start cutting rates in H2 of 2024

<p>Summary points from JP Morgan's 2024 US Economic Outlook</p><ul><li>The economy easily avoided recession in 2023, but labor market activity has been slowing </li><li>We look for momentum to slow further into 2024 as growth slips below trend… </li><li>…and the economy walks a fine line between expansion and contraction </li><li>Drags from monetary policy will persist, and in some cases build, into 2024 </li><li>We expect fiscal support from recent years will turn to a modest fiscal drag in 2024 </li><li>We see real GDP up 0.7% in 2024, down from near-3% in 2023 (%q4/q4) </li><li>Job growth is expected to slow, and the unemployment rate to continue its recent upward trend </li><li>Wage inflation should moderate further next year in a softer labor market </li><li>Inflation trends are already cooling: a softer labor market should bring more moderation </li><li>Core PCE inflation to be up 2.4% in 2024. down from 3.4% in 2023 (%q41
q4) </li><li>With slowing job growth, and further disinflation, we think the FOMC will stay on hold for a while </li><li>FOMC to start lowering rates in H2 of 2024 to avoid a recession, with inflation close to, but still above, target</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.