With inflation cooling considerably in the last two months, investors had been hopeful that signs of economic softness could translate to a dovish pivot from the Federal Reserve, but those hopes were dashed when the central bank downgraded its economic outlook and warned to keep raising interest rates.
In the wake of persistent monetary tightening, economists have projected a 70% chance of U.S. recession in 2023. The stock market is in shambles, with the S&P 500 declining over 19.8% year to date, while the tech-heavy Nasdaq and the Dow lost 40.1% and 9.1% year-to-date, respectively.
