We now expect a recession to start in Q4 and rate cuts to come in Q1 2024. We expect the last rate hike of 25 bps at the Fed’s July meeting and no rate cuts this year. We still forecast aggressive rate cuts in 2024. We now have a total of 175 bps of rate cuts in 2024.

As a result of the change in our Fed view, we have upgraded our view on the US Dollar. We no longer have a rate cut for the Fed this year and fewer total rate cuts in 2023-2024. This is a positive for the US Dollar. Our view is roughly in line with the market.