'Goldilocks' scenario expected in 2024

Some banks are expecting a "Goldilocks" scenario in 2024, but Citi said that is not quite as optimistic. The Wall Street firm expects a recession to begin in the second quarter of next year.

In a note on Wednesday, Andrew Hollenhorst wrote, "The initial signs indicate that the rapid increase in policy interest rates over the last two years (and the need to keep interest rates at this level to lower inflation) will lead to a recession next year."

The note added, "Even when a recession is factored in, core inflation is likely to remain 'sticky' above the 2 percent target for all of 2024. In our base case, the Fed will cut interest rates by 100 basis points next year, starting in July."