Deutsche Bank predicts a more aggressive Federal Reserve rate reduction than expected during a moderate U.S. recession in the first half of 2024.

The bank predicts a 175 basis point reduction in 2024 rates, with the Fed rate dropping from 5.25%-5.5% to 3.5%-3.75% by year-end.

The bank predicts a sharp rise in unemployment to 4.6% by mid-year due to negative economic growth.