Outlook or Look Out! Macro Analysis for 2023
Portfolio strategists look ahead to the capital market forces in play for 2023, from inflation and Fed policy to asset headwinds, tailwinds and risks.
- Interest rates remain a dominant theme into 2023, specifically the uncertainty related to the speed of the Federal Reserve’s hikes, the size of the hikes, and how long rates will remain in restricted territory.
- While there has been plenty of talk about recession, data points in some of the underlying growth indicators tell a different story, notably housing, motor vehicle and aircraft manufacturing, and health insurance costs.
- The economy is likely to slow in 2023, but consumer spending remains robust and credit card delinquency rates remain very low – although the US labor force currently has 6 million fewer workers than before Covid.
- In fixed income, upgrades are still outpacing downgrades, and corporate balance sheets are in pretty good shape, which may help weather a slowdown.
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