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The United States avoided a recession in 2023, but the economy is still not out of the woods heading into a 2024 filled with uncertainties.
The Federal Reserve has raised interest rates to highs not seen since before the Great Recession. The Fed’s current rate target is 5.25% to 5.50%, a level designed to tamp down demand and thus inflation. Historically, though, rate-hiking cycles raise the risk of an economic downturn.
As the calendar flipped from 2022 to 2023, a large number of economists predicted that the U.S. would already be in the throes of a recession by now, but economic growth has instead continued at a robust clip.
As a rule of thumb, recessions are typically, though not always, marked by two consecutive quarters of negative gross domestic product growth.