The Real Economy: March 2024

Revising our 2024 inflation outlook

The recent easing in inflation, coupled with a clear downward trend in rents and a budding productivity boom, have prompted a revision in RSM’s inflation forecast for the year.

In the March issue of The Real Economy, RSM’s chief economist, Joseph Brusuelas, and U.S. economist, Tuan Nguyen, explain why they see inflation declining to the Federal Reserve’s target of 2% and why this will lay the groundwork for the central bank to begin cutting interest rates.

Anticipating four policy rate reductions by the Federal Reserve this year, starting in June, Brusuelas and Nguyen now expect the personal consumption expenditures index, the Fed’s preferred measure of inflation, to reach the central bank’s 2% target by midyear. The cost of rents, previously a sticking point, is likely to push the consumer price index below their original forecast of 2.5%. 

While we continue to forecast that the Fed’s rate cuts will begin in June, we would strongly advocate a May start date, in part to ease tight lending conditions for businesses.
Joe Brusuelas, Chief Economist

But, as with any economic analysis, there are risks. While inflation expectations remain well anchored, the conflict in the Middle East and rising tensions elsewhere are now the greatest risk to economic growth and inflation.

We look at these topics and more in this issue of The Real Economy.

Inside the March issue

Industry spotlight: Manufacturing

Article
Manufacturers navigate tighter environmental regulation
Manufacturers navigate tighter environmental regulation, and those tapping tax credits must understand environmental requirements.

RSM contributors

The Real Economy Livestream series

Middle market outlook: Key economic themes for 2024

Join RSM US Chief Economist Joe Brusuelas and U.S. Chamber of Commerce Executive Vice President Neil Bradley as they discuss the current economic climate, including rising U.S. productivity, and the outlook for inflation and hiring.

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Timely economic analysis and trends to help middle market businesses succeed

Special report

2023 RSM US Middle Market Business Index Special Report: Funding

Rising real interest rates are pushing up the cost of commercial and industrial loans, making it harder for
middle market firms to meet payroll and finance their expansion, according to findings in the third-quarter
RSM US Middle Market Business Index survey.

Find out how businesses are coping with the higher cost of capital in our special report.

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Monthly economic analysis report for the US middle market

The Real Economy Blog

The Real Economy Blog was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

The voice of the middle market

Middle market organizations, which make up the “real economy,” are too big to be small and too small to be big. They have distinct challenges and opportunities around resources, labor, technology, innovation, regulation and more.