How will the US economy perform in 2024? 

Claudia Sahm (Sahm Consulting) joins Richard K. Green (USC Lusk Center for Real Estate) to discuss the US economy’s recovery from COVID alongside additional shocks and infer the implications of the Federal Reserve’s playbook for 2024. 

Sahm’s key points:

• The US economy undeniably turned a corner in 2023
• The US recovery remains stronger than its peer countries
• The Federal Reserve will continue its conservative approach to rate cuts
• The greatest risk to the market in the near future is the Federal Reserve’s sluggish response

Sahm also fields questions on the risk that commercial real estate and regional bank distress poses to the economy, the Federal Reserve’s limits on impacting housing affordability, and more.

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Clayton Dube (USC U.S.-China Institute) joins Richard K. Green (USC Lusk Center for Real Estate) to discuss the condition of U.S.-China relations and the latest developments in China’s global influence on trade, supply chain issues, technology, and more. Dube highlights a challenge Chinese officials are watching closely in the coming years: stalling economic growth. To approach the “middle-income” problem, Dube notes the ways in which the government has both relaxed and tightened its grip on markets in an effort to continue the economy’s upward momentum.

Included in the discussion:

• Security concerns between the U.S. and China
• The important distinction between China’s total Gross Domestic Product (GDP) and GDP per capita
• How China’s tech rivalry with the U.S. is evolving
• Why Chinese firms have overpaid in key U.S. real estate transactions

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Joyce Chang delivers an overview of global economic trends to watch heading into 2023 and beyond.

In the near term, Chang sees a mild recession taking effect in late 2023, with a true “soft landing”, as identified by the Federal Reserve, being unlikely. She notes that overall cycles may be shorter, with a likelihood of 4-year recessions rather than the historic 8 or 10, and markets that rally faster to regain losses.

Included in the long-term outlook are remarks on China’s slowing growth, regions that could benefit from supply chain shifts away from China and nearshoring, and the political divides in the US around ESG (Environmental, Social, Governance) projects and investing.

Richard K. Green also fields questions on the US housing crisis, how rapidly rising interest rates could affect regional banks and nontraditional finance, the implications of a global aging population, and more.

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