Deutsche Bank Forecasts US Recession in 4th Quarter, Followed by Rate Cut

The U.S. economy will slip into a recession in the fourth quarter of 2023, and the Federal Reserve will respond with a rate cut in the following quarter, Deutsche Bank said in a new forecast.
The bank updated key economic projections in a research note last week after several developments on multiple fronts.
According to Deutsche Bank, the Fed will increase the terminal fed funds rate to 5.625 percent, up from its previous estimate of 5.1 percent. Economists cited persistent inflation pressures, better-than-expected economic data, and continued resilience in the labor market.
In recent weeks, Fed officials have signaled that they could become more aggressive in raising interest rates to accomplish a “sufficiently restrictive” monetary position, especially following hot inflation data….