Citigroup economists said that against the background of improving macroeconomic trends, the global economy is likely to grow by about 2.2% in 2023, which is slightly higher than the previous forecast (1.95%). However, even if the current forecast is justified, it will be the weakest growth of the world economy in the last 40 years.
"The improvement in the forecast was due to a more favorable outlook for China than previously expected, the stagnation of the eurozone economy (a contraction was previously expected) and the stability of the US economy. However, high global inflation, which is in the range of 6-7%, still poses a risk to the forecast," the economists said.
As for the prospects for the Fed's monetary policy, Citigroup expects the Central Bank to raise rates three more times in 2023, and it will exceed 5%. Meanwhile, money markets now estimate the terminal rate at 5.3% by July. Now the federal funds rate is in the range of 4.50%-4.75%.
Economists at Goldman Sachs and BofA Global Research also expect the Federal Reserve to raise interest rates three more times this year by a quarter of a percentage point each time.