Forecasts Quarter 1 2023

By: Simona M Mocuta, Chief Economist and Jeremiah Holly, CFA, Portfolio Manager, Louis Basque, CFA, Portfolio Strategist

Global Economic Outlook

  • Global growth will slow into 2023, with US and European growth not much above zero. Risks are to the downside with sub-trend growth extending into 2024.
  • Amid improved supply and slowing demand, a powerful disinflationary episode takes hold. More favorable inflation data could see the Fed cut interest rates late this year.

Emerging Markets Outlook

  • Amid lowing global demand and constricting monetary policy, the economic backdrop for emerging markets (EM) remains difficult.
  • China’s reopening should boost EM growth performance, but risks remain.

Global Capital Markets

  • Financial market oriented signals point to an improving backdrop for capital markets just as economic growth in advanced economies is poised to straddle weak or recessionary conditions — leading to a tenuous balance of risks.
  • Bond markets present opportunities across geographies, maturities and sectors. We prefer allocations to cash and government bonds (US and non-US) to take advantage of current carry and defend against slowing economic growth.

Read Full Commentary

Originally Posted January 27th, 2022, State Street Global Advisors blog




The views expressed in this material are the views of Simona Mocuta, Jeremiah Holly and Louis Basque through the period ended December 31, 2022 and are subject to change based on market and other conditions. This document may contain certain statements deemed to be forward-looking statements.

All statements, other than historical facts, contained within this document that address activities, events or developments that SSGA expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by SSGA in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances, many of which are detailed herein. Such statements are subject to a number of assumptions, risks, uncertainties, many of which are beyond SSGA’s control. Please note that any such statements are not guarantees of any future performance and that actual results or developments may differ materially from those projected in the forward- looking statements.

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