A Not-So-Fresh Start

The new year offers an opportunity for clean slates and new perspectives. But the economy cannot escape the echoes of the recent past. Ripple effects of COVID and the Ukraine invasion continue to impair the outlook.

The year ahead should bring more stable policy: The end of the rate-hiking cycle has been clearly signaled, and the legislative agenda will be limited. Inflation is improving, a welcome relief for consumers and businesses alike.

The outlook is predicated on nothing else going wrong. After a challenging stretch of so many disruptions, that may feel like an optimistic premise. We continue to monitor risks including the U.S. debt ceiling, escalation of the Russia-Ukraine war and volatility surrounding the reopening in China. But as long as workers keep earning and spending, the path to a soft landing remains open.

Key Economic Indicators

Influences on the Forecast