2023 outlook: plunging inflation & a recession
2023 outlook: plunging inflation & a recession
Unpacking my expectations for the US economy & its financial markets in 2023.
2023 begins with US inflation last recorded at an annual pace of 7.1% (as per the CPI), and an unemployment rate that remains low, last recorded at 3.7%.
2023 also comes after 2022 saw major asset price declines. The S&P 500 fell by 19.4%, whilst 10-year Treasuries saw their worst total return since at least 1928.
Focusing on the US, this report seeks to provide insights into the following questions: will inflation remain high? Will unemployment remain low? Will stocks and bonds see another year of significant negative returns, or will they rebound?
In order to try and answer these important questions, it is necessary to first outline the key factors and data points that are likely to be particularly important over the year ahead, and what they suggest is in store for the economy.