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Subject

Prospects for the US economy to end-2022.

Significance

The Federal Reserve (Fed) raised interest rates by 75 basis points (bp) yesterday and plans another 50-75-bp increase next month. This reflects not only concern about inflation and the impact on firms and households, especially ahead of November’s mid-term elections, but also confidence in the economic recovery. Consumption is growing and employment, after falling by more than 25 million at the height of the pandemic, should exceed its pre-pandemic level within months.

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