Macro Outlook report – Twin Policy Test by Gilles Moëc

Key points:

• We confront our forecasts from last year for 2023:
we were too pessimistic on the impact of the
monetary tightening on growth, at least in the US

• We expect a still wide transatlantic gap in 2024. The
Euro area will need to deal with the beginning of
fiscal consolidation coming on top of the lagged
effect of monetary tightening

• Higher long-term interest rates are a challenge. Even
the US will have to adjust its public finances to a
sounder footing, although it’s very unlikely to start in
2024