U.S. economy on thin ice: These are top recession bets for 2023 economy outlook
Welcome to Kitco News' 2023 outlook series. Uncertainty continues to dominate financial markets as central bank monetary policies push the global economy into a recession to cool down inflation. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2023.
On the possibility of a soft landing, Powell also noted that the longer the Fed needs to keep rates higher, the narrower the runway becomes."I don't think anyone knows whether we're going to have a recession or not. And if we do, whether it's going to be a deep one or not, it's just not knowable," he said in December.
However, the bank noted a"distinct risk" of a downturn, with a chance of a recession at 35% next year. On a more bearish side, JPMorgan has warned that a recession is very likely next year."Our view is that market and economic weakness may occur in 2023 as a result of central bank overtightening, with Europe first and the U.S. to follow later next year," JPMorgan's chief global markets strategist Marko Kolanovic said in his 2023 outlook.
"We expect the Fed to continue tightening policy through the first quarter of next year, with the fed funds rate peaking at 5.25% this cycle … That said, we do not expect the Fed to cut rates immediately at the first sign of weakness. Specifically, we expect the Committee to stay on hold for the rest of 2023, and we look for the first rate cut in Q1-2024," the bank said.
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