Here’s how interest rates, recession risk, and more may affect your portfolio in 2023.
Fidelity’s expectations for 5 key trends:
- Inflation rates will decline markedly in 2023 but remain higher than the market anticipates.
- The Fed will slow its tightening cycle and eventually stop hiking rates during 2023, but its policy rate will remain higher for longer than expected.
- The US economy will decelerate into a recession. Our base case is that it will be a relatively mild economic contraction, but we’re actively monitoring downside risks.
- Through fits and starts, China’s relaxation of COVID restrictions may prompt a rebound in services activities and lead to a cyclical economic uptick.
- Interest rates—the yields on Treasury bills and bonds—are likely to remain volatile and trend lower.