As the year draws to a close, the global economy is entering a new phase. Growth, inflation and interest rate increases are all slowing in major economies. Higher borrowing costs have already thrown housing markets into recession, and they will weigh more heavily on consumption and investments.
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Slower Growth, Slower Hikes
U.S. Economic Outlook
December is a natural time to look back and see how the year compared with our expectations. But a year like 2022 can throw off even the best forecasters.
We came into the year expecting the Fed to end asset purchases and raise rates; we did not anticipate such an aggressive pace of hikes. We expected inflation to calm; it is only healing now, after a painful surge through much of the year. We certainly did not expect the Russia-Ukraine war and the ensuing distortion to energy and food markets that drove so much uncertainty this year.