United States: A narrow path Compared with recent history, the current gets narrower monetary tightening cycle is historic and leaves Economic outcomes in the U.S. for 2023—much the narrowest of paths for the economy to like in the rest of the developed world—will be escape without a period of recession. Figure I-13 dominated by monetary policy efforts to illustrates the rapid rise in the policy rate over the accelerate the path of inflation back to target. last four quarters and relative to previous cycles. Growth slowed materially in 2022, but inflation has remained stubbornly elevated and the labor market strong. Further slowdowns in growth and a weakening of the labor market are necessary conditions for disinflation. FIGURE I-13 The pace of rate hikes in 2022 has been historic +.% (Four -bps to -bps an one -bps rate hikes) +.% (Seven -bps rate hikes) +.% (One -bps rate hike) Change in effective federal =  basis funds rate points  cycle  cycle Current cycle Notes: The figure shows changes in the effective federal funds rate during the first four quarters of each hiking cycle. The current cycle assumes an additional 50 bps of tightening will occur at the December 2022 Federal Open Market Committee meeting. A basis point equals one-hundredth of a percentage point. Sources: Vanguard and the Federal Reserve Bank of St. Louis, as of October 31, 2022. 18