Economist Predicts: What Does 2024 Hold for Inflation, Interest Rates and More?
Written by
Gabrielle Olya
Edited by
Ashleigh Ray
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Many Americans have a pessimistic view of what the state of the economy will be in 2024.
A recent GOBankingRates survey found that 59% of Americans believe a recession is “very likely” or “somewhat likely.” A separate GOBankingRates survey found that 31% of Americans see inflation as their top financial stressor heading into 2024 — the most common financial concern among those surveyed.
However, not all economists are feeling as negative about the state of the economy in 2024 as the general public. GOBankingRates spoke with Ryan Severino, chief economist and head of U.S. research at BGO, to get his predictions for 2024 — and his insights may help bring about some peace of mind.
The Economy Will Slow — but Avoid an Official Recession
Severino does not believe a recession will occur in 2024 due to a combination of circumstances.
“First, temporary pandemic-related disruptions have faded,” he began. “Second, the ongoing labor shortage makes the economy resilient and prevents it from overheating. Third, the economy is much less interest-rate sensitive than it used to be. The economy looks set to slow but should avoid an official recession.”
Inflation Will Continue To Ease
Good news for the roughly one-third of Americans who are stressed out about inflation — Severino predicts it will continue to decelerate in 2024.
“Supply-side disruptions associated with the pandemic continue to dissipate,” he said. “Demand is reverting to pre-pandemic trends after a period of strong, inordinate growth following the end of lockdowns. Energy and food inflation have cooled after a spike due to the onset of the war in Europe. Wage growth is slowing. And the slowing in rents and home prices observed last year has yet to fully impact major inflation indexes.”
The Fed Is Done Hiking Rates
Severino believes that the Fed is done hiking rates for a few reasons.
“As mentioned above, inflation should continue to slow, which should stay the Fed’s hand,” he said. “And as the economy slows, the Fed will start to think about cutting rates to support growth. That likely won’t occur quickly but seems probable by the end of 2024.”
Survey methodology: GOBankingRates surveyed 1,039 Americans ages 18 and older from across the country between Nov. 9 and Nov. 13, 2023, asking 19 different questions: (1) How much do you plan to spend on flights/hotels this holiday season?; (2) How much did you spend on flights/hotels last holiday season?; (3) Are you taking any of the following steps to save money on travel?; (4) How much do you plan to spend on holiday shopping?; (5) How much did you spend on holiday shopping last year?; (6) How would you compare your overall financial situation this holiday season to last holiday season?; (7) How much do you plan to donate this holiday season?; (8) How much credit card debt do you have right now?; (9) How much credit card debt have you added in the past six months?; (10) What is the minimum salary that would allow you to live comfortably in 2024?; (11) How concerned are you about layoffs?; (12) Do you live paycheck to paycheck?; (13) What do you believe is the likelihood of a recession in the next year?; (14) How much do you plan to spend on your next house?; (15) What is the highest mortgage rate you would be willing to pay for your next house?; (16) How much do you think mortgage rates will fall over the next year?; (17) Have you relocated to a different state in the past two years to find more affordable housing?; (18) Which of these states would you consider relocating to for more affordable housing?; and (19) What percent of your take-home (after-tax) pay do you spend on your mortgage or rent? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
Survey methodology: GOBankingRates surveyed 1,039 Americans ages 18 and older from across the country between Nov. 9 and Nov. 13, 2023, asking 10 different questions: (1) How would you rate your financial well-being/situation at the end of 2023?; (2) How much do you want to realistically save in the next year?; (3) What types of investments are you considering for 2024? (Select all that apply.); (4) Will you be in debt in 2024?; (5) Will you have an emergency fund going into 2024 and how many months will/would it cover?; (6) Which best describes your top financial goal for 2024?; (7) Are you planning for any of these major milestones in 2024? (Select all that apply.); (8) What is your top financial stressor heading into the new year?; (9) Are you planning for any major job changes in 2024?; and (10) What would you like to have happen the most in 2024? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
More From GOBankingRates
