The Federal Reserve has been aggressively increasing the interest rates to curb the multi-decade high inflation. It has indicated continuing the hikes at a slower pace until inflation falls below 2%. Moreover, Morgan Stanley expects monetary policy to remain the primary driver of asset prices.
With investors sitting on much uncertainty, the Fed’s persistence has increased the risks of a U.S. recession. Furthermore, the International Monetary Fund (IMF) expects economic growth to be 2.7% in 2023. In addition, Kristalina Georgieva, IMF chief, warned that one-third of the world economy would likely be in recession in 2023.
