(CTN News) – According to a recent survey conducted by the National Association for Business Economics, the majority of business economists are optimistic about the U.S. economy’s ability to avoid a recession in 2024, even if the job market weakens due to high-interest rates.
Out of the 38 economists surveyed, 24% believe that a recession in 2024 is likely.
These economists represent various prestigious organizations such as Morgan Stanley, the University of Arkansas, and Nationwide.
These predictions suggest that there is confidence in the Federal Reserve’s ability to effectively manage the economy by implementing high interest rates to control inflation, while still allowing for growth to occur.
Ellen Zentner, is the president of the Economists Association and the top executive in the United States. economist at Morgan Stanley stated that although most respondents predict an increase in the unemployment rate, a majority believe that it will not surpass 5%.
The Federal Reserve has recently raised its main interest rate to a level above 5.25%, the highest it has been since the early 2000s, after being close to zero in early 2022.
These higher interest rates aim to curb inflation by making borrowing more costly and impacting the prices of stocks and other investments. Typically, this combination leads to reduced spending and hampers inflation.
Despite these high-interest rates, the job market has remained remarkably stable, with the unemployment rate standing at a low 3.9% in October.
A majority of the economists who were surveyed anticipate a further deceleration in inflation during the year 2024. However, a significant number of them suggest that it might not reach the Federal Reserve’s desired rate of 2% until the subsequent year.