OECD: US FED FUNDS RATE SEEN PEAKING AT 5.25%-5.5% FROM Q2 2023

In its latest outlook published on Wednesday, the OECD said that it sees US Fed funds rate peaking at 5.25%-5.5% from Q2 2023, followed by two "modest" cuts in H2 2024.

Additional takeaways

OECD sees US growth of 1.6% in 2023 and 1.0% in 2024 (previously 1.5% in 2023 and 0.9% in 2024).

Sees global GDP growth of 2.7% in 2023 and 2.9% in 2024 (previously 2.6% in 2023 and 2.9% in 2024).

Sees Chinese growth of 5.4% in 2023 and 5.1% in 2024 (previously 5.3% in 2023 and 4.9% in 2024).

Sees Japanese growth of 1.3% in 2023 and 1.1% in 2024 (previously 1.8% in 2023 and 0.9% in 2024).

Sees Euro area growth of 0.9% in 2023 and 1.5% in 2024 (previously 0.8% in 2023 and 1.4% in 2024).

Sees ECB rates peaking in q3 2023 and remaining unchanged at 4.25% to end 2024.

UK growth of 0.3% in 2023 and 1.0% in 2024 (previously -0.2% in 2023 and 0.9% in 2024).

No rate hike in Japan until end of 2024.

No further rate hikes expected in Canada and South Korea, rate peaks expected in Australia and the UK from Q2 2023.