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Economic Update    Recent economic da ta has shown above trend growth fueled by a rise in consumer spending and a continuing healthy US job market. Inflationary trends are subsiding, but core levels remain above the Fed’s target.Given the cumulative effects of restrictive monetary policy and tighter financial conditions, we believe the economy will gradually soften and the Fed will loosen monetary policy in 2024. As expected at the December meeting,the Federal Open Market Committee voted unanimously to leave the Federal Funds rate unchanged at a target range of 5.25 -5.50%.Fed Chair Powell signaled that the federal funds rate is likely at or near its peak. The new Summary of Economic Projections reflected Core PCE inflation reaching the target 2%level in 2026 without a significant increase in unemployment.We believe the FOMC will loosen monetary policy in mid-2024 as inflation and economic growth continue to moderate. US Treasury rates fell steeply across the yield curve in December on decelerating inflation readings and a more dovish Federal Reserve outlook.The 2-year Treasury yield declined 43 basis points to 4.25%,the 5-year Treasury yield dropped 42 basis points to 3.85%,and the 10- year Treasury yield decreased 45 basis points to 3.88%.The inversion between the 2-year Treasury yield and 10-year Treasury yield widened to -37 basis points at December month-end versus -35 basis points at November month-end. The spread between the 2-year Treasury and 10-year Treasury yield one year ago was -55 basis points. The inversion between 3-month and 10-year Treasuries widened to - 146 basis points in December from -107 basis points in November. Interest rates peaked in 2023 followed by the Fed’s dovish pivot late in the year,resulting in a decline in yields across the curve and signaling less restrictive monetary policy in 2024.The shape of the yield curve indicates that the probability of recession persists. 3