The Fed cutting rates in June will depend on monthly inflation numbers and particularly CPI numbers in the near term.
The most likely path for the economy is one of a continued, very tight labor market.
Most likely, the deficit and debt will continue to worsen, gradually adding to the underlying level of real interest rates.
Fed officials worry that they might still have to trigger a recession to get inflation all the way down to their 2% target.
Despite all the uncertainties, recent data suggest that the economy is looking stronger.
Higher real interest rates caused by the federal deficit could drag on the economy.
There is an over-reliance on traditional indicators that just don't work as well in the economy of the early 2020s.
At the Fed's annual meeting this week, Chairman Powell will discuss today's economic landscape and the road ahead.
It looks increasingly likely that the U.S. economy will avoid entering a recession in 2023.
A recession, when it eventually arrives, should be relatively mild.
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