Future Direction – Market Outlooks
Over the past few months, projections of where the economy’s headed have mostly leaned negative. Indeed, economists and banks alike have forecasted different versions of similar scenarios. For example, Goldman Sachs recently published their 2023 outlook summary in which they explained an expectation of global growth of 1.8% in 2023, as US resilience contrasts with a European recession and a bumpy reopening in China. Moreover, other banks like Barclays have made statements preferring fixed-income securities like bonds over more volatile stocks. Most recently, the Feds changed the interest rate and the speed at which it would change. Specifically, Federal Reserve officials decided earlier this month that smaller interest rate increases should happen soon as they evaluate the impact policy has on the economy. Indeed, the ultimate rate hike will probably be higher than officials had thought.
Moreover, at the September meeting, committee members penciled in a terminal funds rate of around 4.6%; recent statements have indicated the level could exceed 5%. The Feds have come under some backlash in light of all these moves. Specifically, criticism that they could be overtightening the economy and that policymakers are too focused on backward-looking data and, in turn, missing key signs related to the inflation rate.
What do you think about where the economy is headed? And is the fed doing the right thing?
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.