Central Banks to Pause Rate Hikes as Inflation Declines
CHICAGO & LONDON, December 19, 2022–(BUSINESS WIRE)–Northern Trust, a leading global asset manager with US$1.2 trillion in assets under management, expects 2023 to be a turbulent year as conditions pivot from inflation and monetary policy fears to a weak global economy, but the firm also expects market volatility to somewhat temper due to lower inflation and a pause in central bank interest rate increases. A reduction in rates is not seen as likely.
“While we believe there is downside risk from fundamentals, we see upside potential from likely improved investor sentiment, “said Northern Trust Chief Investment Officer Angelo Manioudakis. “Financial markets will have to balance the immediacy of disappointing global growth against the backdrop of greater certainty on central bank policy, a reduction in interest-rate volatility and the potential of a return to growth later in the year.”
Change Among Constants
These changing conditions are behind the main message of Northern Trust’s 2023 Outlook being that it will be a “pivotal” year, although some conditions will persist.
The firm expects growth to continue to be constrained globally, with some regions arguably already in recession and others on the precipice. It also believes that China’s pandemic-to-endemic transition will continue to materially impact the outlook for global economic demand.
Investment Themes Drive Outlook
Northern Trust’s 2023 Outlook builds off the…
