Predictions

For 2023, as compiled on 2022-12-29

GS outlook

• Recession at 30% probability, core inflation falls to 3%, +1% increase to unemployment rate.
• Peak short term interest rate at 5.25%, no cuts in 2023.
• Rate hikes +25bp each in Feb, Mar, and May 2023.
• Recession in Europe caused by increased energy costs.

CS outlook

• No recession, GDP +0.8%，inflation falls to 3.8%.
• Pullback of globalization, global trade to decline.
• Invest in defensive sectors- healthcare, infrastructure, and silver.

Fidelity outlook

• More deglobalisation, reshoring, opportunities for Thailand and Vietnam.
• Equities prices still high, volatility to continue, stay defensive.
• Stay in cash and uncorrelated assets, govt bonds.
• Central bank can remain excessively hawkish and overshoot rate raises.
• Credit default spreads not currrently priced in for recession as of Nov 2022.

Blackrock outlook

• Inflation cannot be contained without crushing demand.
• Recession is inevitable. Reprice equities and add bonds.
• Go with inflation-linked bonds.

BNY Mellon

• Mild recession 70% probability, recovery expected at end of 2023.
• Inflation goes down to near 2%.
• Fed central bank raises short term rates and hold at around 5% in mid-2023.
• Bonds with higher yields become attractive investment options.