On December 13, a team of Citi economists led by Andrew Hollenhorst predicted that by 2025 U.S. companies will shift from less hiring to outright layoffs. This, in turn, will lead to a pullback in consumer spending and business investment.

At the same time, they expect an easy labor market to reduce inflationary pressures in the service sector, and weak global conditions to dampen commodity prices. This will lead the Fed to take aggressive action - it is expected to cut interest rates by 25 basis points at each meeting until next July, bringing the federal funds rate down to between 3% and 3.25%. This is well below market expectations, which expect the fed funds rate to reach around 4% by then.