Ever since the Federal Reserve began raising interest rates to fight inflation in March 2022, economists and Wall Street strategists have debated whether a recession will hit the U.S. and take the stock market down with it.
Mike Wilson, Morgan Stanley’s chief investment officer and chief U.S. equity strategist, has always landed in the bears’ camp in this debate. In 2022, he correctly forecast that rising interest rates and high inflation would pull down stock prices. But this year—to Wilson’s surprise and despite the threat of higher interest rates, sticky inflation, and even a regional banking crisis—the S&P 500 rallied as much as 19% due in large part to the resilient labor market.
