The Fed's DSGE Model Forecast for 2023

The probability of a not-so-soft landing defined as 4.25 GDP growth dipping below –1%. By the end of 2023 has declined to 26% from 41% in March and 70% last September. So there it sounds like we've got some resilient economy at work here. Maybe even therefore a tight labor market, resilient economy, tight labor market,. There's the inflation, right? Well, at least these DSGE numbers, going back to FRB&Y, inflation projections are a bit higher in 2023 due to the fact that inflation in Q1 has once more surprise to the upside relative to the survey professional forecasters that the Philadelphia Fed puts together in February.

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