More decision-makers at the Federal Reserve and on Wall Street are coming around to the view that the U.S. economy can avoid a crash—or at least have a kinder, gentler recession than they once predicted.

Economists at Deutsche Bank issued a revised outlook for the economy Monday, toning down the pessimism of their previous forecast calling for a recession. The bank now expects a recession to begin at the beginning of 2024 rather than the end of 2023, and that unemployment will peak at 4.6%, compared to more than 5% in their last forecast, and up from the current level of 3.8% as of August.

Also on Monday, Michael S. Barr, vice chair of supervision for the Fed and a member of the central bank’s policy committee, added his voice to the chorus of Fed officials who have said a soft landing looks increasingly likely.

“I now see a higher probability than I did previously of the U.S. economy achieving a return to price stability without the degree of job losses that have typically accompanied sಞignificant monetary policy tightening cycles,” Barr said in a speech at the Forecasters Club in New York, according to pre⛦pared remarks. 

As high inflation raged last year in the wake of post-pandemic reopenings, some economists warned that millions of people would have to lose their jobs for consumer spending to fall. Falling consumer spending would allow supply and demand to rebalance enough that prices for everyday things would stop acceler💞ating. 

Since then, inflation has cooled (though not yet down to the 2% annual rate that policymakers at the Fed are aiming for) and 澳洲幸运5官方开奖结果体彩网:unemployment has stayed low, raising hopes that the economy will have a “soft landing” rather than a crash.

That 澳洲幸运5官方开奖结果体彩网:would be a historical rarity. The Fed has raised its benchmark interest rate to a 22-year high to combat inflation. In the past, high interest rates have proven to be bitter medicine for the economy, discouraging borrowing and spending so much that a recession has ensued eight out of the last nine times the Fed has gone on a rate-hike campaign.

This time around, consumer spending and employment have stayed resilient, raising the possibility for a soft landing. It is also prompting Fed officials to warn they’ll have to keep 澳洲幸运5官方开奖结果体彩网:interest rates higher for longer to get inflation under control.

To be sure, the economy isn’t out of the woods. Forecasters at Deutsche Bank pointed to several forces that could make the landing less than soft: 澳洲幸运5官方开奖结果体彩网:high gas prices, the return of 澳洲幸运5官方开奖结果体彩网:student loan payments diverting money away from other spending, the 澳洲幸运5官方开奖结果体彩网:auto worker strike, and banks 澳洲幸运5官方开奖结果体ꦰ彩网🥂:growing more reluctant to lend money are among the powerful forces dragging the economy toward a recession.

“Over the past several months, the case for a soft landing has undeniably strengthened,” M꧟atthew Luzzetti, chief U.S. economist at Deutsche Bank, together with other economists, wrote in the commentary. “Despite these developments, we continue to view the economy as slowing amidst intensifying crosscurrents.”

A survey of professional forecasters by the Federal Reserve Bank of Philadelphia in September pegged the chances of a recession in the last quarter of 2023 澳洲幸运5官方开奖结果体彩网:at around one in three.