a top economist at jpmorgan chase  co jpm no longer expects a recession to arrive in the us before the end of 2023 he doesnt expect one in 2024 either but said the risk of a potential downturn remains elevated michael feroli chief us economist at jpmorgan on friday officially abandoned the banks earlier recession forecast putting the largest us bank by assets more in line with others on wall street in thinking that a recession might be avoided even though the federal reserve has increased rates to a 22year high explaining his view in a friday client note feroli cited improving thirdquarter data waning inflation and the increasing likelihood that the fed will succeed in its effort to tame inflation without cracking the us economy congresss temporary resolution of the debtceiling standoff in june as well as us authorities efforts to shore up the us banking system following the collapse of silicon valley bank also factored into ferolis decision in particular he cited strong productivity data released earlier this week as one example of how labor supply is returning to a state of equilibrium all of these developments helped inspire his decision to raise his forecast for thirdquarter gdp growth to 25 from 05 the productivity of american workers and companies rebounded in the second quarter and grew at a 37 annual pace according to official government data the rate surpassed economists expectations according to feroli us stocks may already be anticipating a further boost to productivity driven by the advent of the artificialintelligence craze while feroli has removed the recession call from his base case he acknowledged that risks of a downturn persist should inflation reaccelerate it could provoke the fed into more interestrate hikes which could bring down the economy while we and the markets think it is done it probably wouldnt take much of an upside inflation surprise for the fomc to deliver the extra rate hike that was signaled in the june dots with perhaps even more to come he said to be sure even if a recession is avoided feroli expects growth to slow to a subpar pace as tighter banklending standards and less bountiful government spending take a toll as for the fed policy feroli expects the central bank will start cutting rates again in the third quarter of 2024 the fed reliably cuts rates in recessions however last week chair powell indicated that with rates now in restrictive territory even absent a recession they have scope to adjust the funds rate lower in the event inflation comes down  which both he and we project he said so while we dont foresee a rapid cutting cycle we do look for policy rates to be adjusted lower beginning in 3q24 heres a breakdown of ferolis revised forecasts for unemployment gdp growth and the fedfunds rate a recession call had been a bedrock of jpms house views for months with it codified in ferolis 2023 outlook published late last year it was integral to the banks equity strategists bearish outlook on the stock market the bank isnt alone economists and strategists at goldman sachs group gs apollo apo and elsewhere have dropped or tempered their recession calls which were a consensus view among wall street economists heading into 2023 stocks closed lower friday with the dow jones industrial average djia and sp 500 spx posting their first weekly loss in three weeks shedding 11 and 23 respectively since monday the nasdaq composite index comp booked its biggest weekly percentage drop since march 10 falling 29 according to dow jones market data this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal