Investors should brace for another turbulent year in the financial markets, economists have warned as central banks fight inflation, China reopens its economy after Covid-19 restrictions and the Ukraine war pushes the global economy towards recession.
The first half of the new year is likely to be choppy, according to Wall Street predictions, after global markets suffered their biggest fall since the 2008 financial crisis last year.
But the US S&P 500 is still expected to end 2023 a little higher than it began the year. The average target of 22 strategists polled by Bloomberg has the S&P 500 ending 2023 at 4,078 points – about 6% higher than it ended 2022.
Economists predict the US Federal Reserve will slow its interest rate hikes this year, as the outlook for America’s economy sours. US inflation has dropped back from its peak last summer, while the series of Fed rate hikes in 2022 has also cooled the housing market.
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