Ethereum (ETH) price surged by 7% on May 20 yesterday, in line with the overall market recovery.

Ethereum (ETH) price surged by 7% on May 20 yesterday, in line with the overall market recovery. The leading altcoin briefly traded above the $2,500 psychological level

In an interview with Kitco News, economists at Moody's Analytics said that while they expect the U.S. to avoid a recession this year, they see a high probability of one developing in 2024.

"We’re not expecting a recession in 2023. We think the economy will continue to grow, albeit slowly, with the unemployment rate remaining low and inflation gradually declining throughout the year," said economists Christian Richter and Pranav Kashyap.

"However, we do see a high probability of a recession developing in 2024 as the Federal Reserve continues to hike interest rates and the full impact of those hikes begins to take hold."

Earlier this month, the U.S. Bureau of Labor Statistics reported that the consumer price index rose 4.9% in April from the previous year, marking the smallest 12-month increase since November 2021. Economists polled by Dow Jones had anticipated a 4.4% rise and a 0.4% monthly increase.

"The broadest measure of consumer prices, the personal consumption expenditures price index, is also expected to decline gradually from the 4.2% year-over-year gain reported for March," said economists at Moody's Analytics.

"We project that the PCE price index will reach the Fed's 2.5% year-over-year target in the fourth quarter of 2023, and the unemployment rate will remain at 3.7% throughout the year."

The economists noted that the labor market remains strong, with the unemployment rate holding steady at 3.7% for the third consecutive month in April. Economists had predicted a slight rise to 3.8% after March saw the jobless rate unexpectedly tick down from 3.9% to 3.7%.

"Despite the small decrease in the unemployment rate from 3.8% to 3.7%, we observe a continuation of the gradual decline in labor market strength, evident in the slight uptick in the U-3 unemployment rate to 3.7% from 3.6% in the prior month," said economists at Moody's Analytics.

"Furthermore, there was a modest rise in the U-6 unemployment rate, which takes into account underemployment and those who have become discouraged in their job search, to 7.3% from 7.1% in the previous month."

Economists at Moody's Analytics also noted that they expect the Federal Reserve to continue raising interest rates in 2023.

"We anticipate the Fed funds rate will reach a peak of 5.25% to 5.5% by the third quarter of 2023, and then remain at that level for the remainder of the year as the full impact of the rate hikes on the economy begins to take hold," said economists Christian Richter and Pranav Kashyap.

"We project that the Fed will begin cutting interest rates in the first quarter of 2024, gradually reducing the rate by 100 basis points throughout the year to reach 4.25% by the fourth quarter."