US RECESSION IN 2023?
On Wednesday, Mr Powell also said inflation remains “far too high”, and that there was still a need to take interest rates to a “sufficiently restrictive” level.
He said the Fed would stay the course until the job is done, noting that history warns against loosening policy too early.
Some economists believe the US will likely enter a recession in the fourth quarter of 2023.
“I think what we’ll need to debate over the next few months is the depth and timing of the recession,” said Mr Arindam.
“The time gap between when rate hikes stop and the recession starts, I think, is largely conditional on the quantum and pace of the rate hikes.”
Heading into 2023, the baseline outlook still calls for US dollar strength, but of lower magnitude and a different composition than this year, JPMorgan said earlier.
The USD can fare well, even if there is a mild US recession, said Mr Arindam, highlighting that such events tend to spur flight to the buying of the dollar.
From an investment flow standpoint, “the rest of the world really doesn’t look very appetising”, he added.
“So we just don’t see the natural, organic capital pull out of the US into other parts of the world that will give US dollar weakness.”