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Barclays Delays Call for US Recession, Fed Cuts Until End of 2023

  • Start of ‘shallow recession’ delayed to second quarter
  • Fed could wait one more meeting before cutting interest rates
A person stands at an ATM at a Barclays Plc branch in Newcastle, UK. 

A person stands at an ATM at a Barclays Plc branch in Newcastle, UK. 

Photographer: Ian Forsyth/Bloomberg

Barclays Plc economists now see a US recession taking place one quarter later than expected in the wake of resilient economic activity, which should lead the Federal Reserve to delay the start of interest-rate cuts.

The US should experience a “shallow recession” from the second to fourth quarters of 2023, economists led by Marc Giannoni said in a note Tuesday. With the economic downturn beginning three months later than originally projected, they now see the Fed waiting longer before cutting interest rates, forecasting reductions of 25 basis points at both the November and December meetings next year.