Federal Reserve Chair Jerome Powell kicked off the holiday season with another interest-rate increase. He also lit the fuse for a sell-off in the stock market by telling the world, “We have more work to do,” signaling additional rate hikes in 2023. A year-end “Santa Claus Rally” could still materialize, but so far, the stock market has preferred the playbook of the Grinch.
The global economy in 2023 is expected to be, in a word, nasty.
Citi is predicting “rolling recessions,” the Institute of International Finance expects global growth on a par with 2009, a dreadful year, and the Organization for Economic Cooperation and Development foresees a “very difficult” economic outlook. At the Fed, the latest view of the economy’s future is similarly bleak.
