Goldman Sachs Chief Economist Jan Hatzius predicted that “real disposable income looks set to reaccelerate in 2024.”
, rose 3.3% over one year earlier in July, up from June’s 3%.
“Second, we still strongly disagree with the notion that a growing drag from the ‘long and variable lags’ of monetary policy will push the economy toward recession,” Hatzius wrote. Goldman cited cooling inflation as well as the robust job market as reasons for reduced odds of a recession.Fed analysts predicted in December that a recession was a “plausible” outcome.In May and June, the Fed staff projections “continued to assume” the US economy would be in recession by the end of the year.By the third quarter of last year, growth had rebounded to a 3.2% annual rate, and has remained at 2% or above since then, higher than the 1.
As a result, Hatzius wrote that a move by the Fed to raise interest rates later this month was “off the table” and that a hurdle for a rate hike in November was “significant.”
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