In a Wednesday note to clients, JPMorgan analysts broke down their economic forecast for 2023. The TL;DR of it was that the US is on a collision course with a recession, and the Fed will have a hard time driving the economy toward anything else.

1. JPMorgan's not betting that the Fed can dodge a recession, as they expect policymakers' rate increases to run further into next year and continue to shrink the economy.

The FOMC still has 100 basis points more of rate hikes to go, in the bank's view. December will bring a 50 basis-point hike, and then investors should expect 25 basis-point hikes, one in February and another in March. 

"The almost 500bp of expected cumulative hikes is already delivering a commensurate squeeze of financial conditions," JPMorgan analysts noted. "[W]hich we believe will tip the economy into mild recession later next year."

Nonetheless, prices remain 7.7% higher year-over-year.

The labor market is one critical variable that policymakers will be eyeing. Remember, more people working and earning means more money being poured into the economy, which means prices will remain high. 

To cool down the economy, then, the Fed will likely look to tame hourly wage growth and push the unemployment rate higher, JPMorgan said.

"By most measures hourly wage growth is currently running around 5%," the analysts wrote. "That likely needs to run closer to 3.5% before policymakers can feel more comfortable about returning to 2% inflation. And that sort of wage growth deceleration will likely require an unemployment rate between 4% and 5%, depending on how entrenched wage growth expectations have become."

The Fed's tightening efforts, ultimately, will tip the economy into a recession, JPMorgan analysts said. 

But since it's not a secret or unexpected, the recession could be mild. 

"If we do have a downturn next year, it will be the most well-telegraphed recession in modern memory. That fact alone should change the nature of the slowdown."