The US economy started 2024 on a softer note than anticipated as elevated inflation and interest rates continued to weigh on growth. While we do not forecast a recession in 2024, we do expect consumer spending growth to cool further and for overall GDP growth to slow to under 1% over the Q2 to Q3 2024 period. Following stalled progress on inflation in Q1 2024, April & May data show renewed relief. However, we do not expect the Fed’s 2% target to be achieved until Q2 2025. Interest rates should fall starting in late 2024 but may ultimately stabilize at levels exceeding pre-pandemic averages.