Highlights:

• The US will not escape a mild 2023 recession amid the Fed's fight against inflation. We expect barely positive growth (0.3%), with a contraction in activity in the middle of the year. But unemployment will exceed the Fed's 4.6% YE forecast. 
• In the final months of 2022, demand has been propped up by household dissaving and increased borrowing. This is unlikely to be sustained and will add to the hit of higher rates on capex and the construction sector.
• The Fed wows to push the Fed funds rate to above 5% by Q1 2023 and keep it there for the whole year. This commitment will be hard to maintain given the economy's deterioration, and we expect a 50bps rate cut towards the end of the year. The Fed's aggressiveness is the root of the significant downside risks to our growth forecast.
   

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