Planting seeds for inflection points in 2023

RECESSION is looming for the US and much of Europe. Yet, financial markets don’t seem to mind. The reason for the gap between the downbeat economic outlook and upbeat investor sentiment is financial markets’ habit of anticipating turning points as far out as six to nine months before they actually occur.

There are three key inflection points on the horizon: inflation, policy rates and economic growth.

The first already looks to have turned, while the US Federal Reserve’s policy rates and a bottom in economic growth are more likely to happen somewhere from the middle to the end of this year.