NVI Technical College Information

Economic Feasibility

Inflation comes back (20%): The decline in inflation due to

Scenarios

decreasing supply chain pressures proves to be temporary.

Baseline (60%): Economic growth slows to the potential rate of

Continued strength in the labor market pushes wages up, leading to

around 1.5% to 1.6%, while inflation moderates to below 3% by

higher costs and prices.

2025. This long-desired “ soft landing ” is accompanied by a stable

labor market, despite slowing job growth. Slow growth in Europe

The Fed, having attempted to slow inflation through shock therapy

and China, higher energy prices, and an expensive dollar have not

in 2022 and 2023, proves reluctant or unable to continue the effort,

proven to be strong enough headwinds to push the US economy

A

which presents significant dangers to the financial system.

into recession, or even to slow it below potential.

Inflation settles in at about 4.5%. Although short-term interest rates

Some sectors, however, do experience weakness. High interest rates

remain moderate because of the Fed ’ s reluctance to create more

and market saturation reduce demand for consumer durables and

risk, long-term rates continue to rise as inflation expectations move

housing. Investment in nonresidential structures remains weak, as

up.

the oversupply of office buildings and retail space weighs on the

market.

By 2026, mortgage rates are over 9.0%, with the expected impact on

housing. The combination of high interest rates and uncertainty

Construction of manufacturing structures — encouraged by efforts to

slows growth, and the unemployment rate gradually rises over the

build chip plants in the United States as well as alternative energy

forecast horizon.

production — offsets this weakness.

Source: Deloitte

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