Economists Optimistic About U.S. Economy in 2024 Despite Elevated Recession Risk

Federal Reserve's pivot boosts growth expectations, with markets anticipating rate cuts starting in March.

The Federal Reserve's pivot from considering rate hikes to discussing the timing of the first cut has led to improved expectations for U.S. economic growth in 2024, with real GDP growth estimates now at 1.3% year-over-year.
Despite the improved outlook, the New York Fed's probability of a recession within the next twelve months remains elevated at 52%, with a historically accurate yield curve indicator suggesting that recession risk remains above-average.
Futures markets are currently expecting the Fed to begin lowering short-term interest rates in March and making at least six cuts of 25 basis points (0.25%).
The U.S. economy grew at a surprisingly strong rate in 2023, with inflation coming down and the jobs market staying strong.
Many economists feel quite positive looking ahead into 2024, with Goldman Sachs seeing just 15 percent odds of a recession over the next 12 months and the Fed anticipating three interest rate cuts next year.