GDP revisions and stronger-than-expected economic indicators in late 2022 prompted an upgrade to our Q4 2022 GDP forecast to 1.9 percent. However, it appears that the economy is now cooling and we expect the US to slip into a recession starting in Q1 2023. Recent progress in inflation data are welcome, but much more work is needed. Inflation will remain elevated it 2024. The Federal Reserve will continue to raise interest rates in early 2023, though at a slower pace. We do not expect rates to fall until 2024.