2922 certainly didn’t fare well in the diaries of optimistic market commentators and forecasters, including those who considered inflation and market losses short-term.
Inflation not only remained, but also remained federal Reserve Look like you were late to the party. Equity markets bore the brunt of subsequent action by central banks in their race to catch up. Nothing was spared – not equity, not bonds.
SPDR S&P 500 ETF Trust Spy lost more than 20% since the beginning of the year, while Vanguard Total Bond Market Index Fund ETF bnd shed over 13%.
some people thought Vladimir Putin’s war with ukraine And their tantrums in response to Western sanctions will keep oil afloat. That too failed towards the end of the year as demand concerns from China emerged.
As the world prepares itself for 2023, here is a look at the warnings given by three leading economists, known for their tough and often contrarian stances.
Nouriel Roubini: In mid-December, leading economist Nouriel RoubiniIs known “Dr. Doom” openly expressed his skepticism over the “conventional wisdom” of Wall Street and policy makers for his accurate prediction of the 2008 financial crisis, saying that it had been “systematically wrong”.
“First, he said that inflation was going to be temporary. . . then there was a debate about whether the rising inflation was due to bad policies or due to bad luck. Roubini said he disagreed with the consensus and said the recession was deep. Will be
“No, it’s not going to be a short and shallow recession, it’s going to be deep and long,” he said Said In an interview with the Financial Times.
Larry Summers: former treasury secretary Lawrence H. Summers, In early December, warned that there is still a long way to go to achieve inflation Down where the Federal Reserve wants it.
He also highlighted that achieving a soft landing may be more difficult than previously thought. “My understanding is that many people think of achieving a soft landing b/w all these mechanisms that kick in. At a certain point, consumers run out of savings. Then you have a wile e coyote That’s the kind of moment where consumption goes down,” Summers explained.
The professor also believes that if the US does not control inflation and rates eventually rise well above current levels, the rest of the world will “hurt badly”, as in the early 1980s happened. They are creating geopolitical dislocations along with rate hikes and the dollar Serious problems for many developing countries.
“The US should lead global efforts to more quickly resolve sovereign debt problems and thereby catalyze higher debt levels international monetary fund And this world Bankhe said in his tweet.
Mohamed Al-Arian: Allianz chief economic advisor Mohammed Al-Arian There have been skeptics this year on some high-def calls saying the US is less likely to enter a recession. El-Arian cautioned that it was important to keep An open mind on the characteristics of a potential recession.
“Many ‘high-pitched’ US recession calls are immediately paired with claims that it will be ‘small and shallow.’ “Important to keep an open mind on the characteristics of a potential recession,” El-Arian tweeted.
The eminent economist also believes that inflation is going to remain stable and when it reaches 4%, a major decision will be taken by the government. Society on what will be the next steps.
“For many reasons we are not going back to where we came from. A ridiculous regime of extremely low interest rates and infinite qi has unintended consequences. Inflation is not going to come down very fast. “We’re going to get stable inflation,” El-Arian said on Bloomberg TV.