Wall Street Analysts Highly Likely Predict Global Recession in 2023

In September 2022, the S&P 500 index lost almost 8% due to the increase in the US Federal Reserve interest rate, the strong dollar and the unstable situation in the commodity markets. There is fear among investors in the stock markets. This is evidenced by the record weakening of the pound sterling and the euro.

Analysts Alejandra Grindal and Patrick Ayres of research firm Ned Davis estimate the likelihood of a global recession at 98%. A global recession could hit during 2023, which could lead to another drop in stocks on the stock market. In the stock market today, fear prevails over greed among investors. This has the effect of scaring off investors who have been betting on stock recovery. Earlier this week, the S&P 500 hit 3,655.05, its lowest level since December 2020. In September, the S&P 500 index lost about 8% due to the increase in interest rates and the tightening of monetary policy by the US Federal Reserve. Investors have been hoping for economic growth for several months. However, investors have fears due to rising inflation, a decline in the industrial and construction sectors. The economic situation continues to deteriorate.

Experts and analysts from various financial institutions also fear the risk of a recession.

“Today, one can observe the first signs that indicate a drop in economic growth, including in the real estate market. Representatives of various industries react to the policy of the US Federal Reserve with a delay, but the hour of reckoning may come soon, ” – this is the opinion of Liz Shalette (IT Director of Morgan Stanley)

“The central banks of different countries are forced to fight high inflation, raise rates, while employers are trying to keep employees. This situation could lead to an even sharper rise in interest rates by the spring of 2023, which will have a negative impact on bonds and growth stocks,” – said Mike Bailey (director of research at FBB Capital Partners).

Analysts from Goldman Sachs predict that due to further tightening of monetary policy in the US, the S&P 500 index could fall to 2900 points, and unemployment could rise to 6%. The most negative forecast implies a fall in the S&P 500 by another 20%. Such a drop would be comparable to the 2008 financial crisis. According to a more optimistic forecast, the unemployment rate will be 5.1%, and the S&P 500 index in this case will fall to 3400 points (by 6.9%).