Recession will add to disinflationary pressure

We expect inflation to fall more rapidly than the Fed anticipates, albeit partly because the even-bigger surge in interest rates will send the economy into a mild recession early next year and drive up the unemployment rate. As a result, we also expect the Fed to be in position to cut interest rates again from late 2023, which should trigger a rebound in GDP growth in 2024. 

Note: We’ll be discussing the key takeaways from this report in an online session shortly after the release of September CPI at 11:00 ET/16:00 BST on Thursday, 13^th October. Register here to join.