Another investment bank slapped the face , and Deutsche Bank retracted its judgment that the Unite

Deutsche Bank made a 180-degree turn, reversing the recession of two years ago**.

Deutsche Bank noted in a report on MondayThe U.S. economy has performed well in 2023, with inflation moving toward the Fed's 2% target and the labor market remaining resilient. As financial conditions turn accommodative, downside risks to growth are reduced.

Matthew Luzzetti, an analyst at Deutsche Bank, said:

We now believe that the economy will move down this narrow path, that the labor market will pay a limited price, and that the economy will be able to avoid a recession. While inflation is likely to remain stubborn in the near term, it is steadily declining towards the Fed's target.

At that time, the bank's team** Fed interest rates were set to rise between 5% and 6%, leading to a clear "recession" at the end of 2023 and pushing the unemployment rate up by a few percentage points.

While interest rates have risen to this level, the U.S. unemployment rate was 37%, the same as in April 2022.

The strong performance of the U.S. labor market over the past year has often puzzled analysts, including the recent release of the January non-farm payrolls report, which beat expectations by a large margin. This strong momentum has led other economists, including Fed staff, to postpone or reverse recession expectations in recent months.

Last week, the Fed** maintained borrowing costs at their highest level since the early 2000s and cemented their stance of cutting interest rates, although Fed Powell reversed expectations that rate cuts would begin as soon as March.

Deutsche Bank**, the Fed's first rate cut will be in June, with a cumulative reduction of one percentage point by the end of 2024. Ahead of last week's Fed meeting, the bank expects to cut interest rates by 175 percentage points.

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