What You Need to Know The global economic outlook deteriorated sharply in the second quarter and markets are increasingly concerned that higher rates will lead to a recession. This outcome isn’t a certainty, but the probability of slower or negative growth has increased materially as inflation has stayed high.
Key Forecast Trends We have upgraded inflation forecasts—and downgraded growth—and now expect global GDP to expand at a rate well below potential in 2023. Regardless of whether the economic slowdown meets the technical definition of a recession, the next few quarters aren’t going to feel good. Although we believe that there is still a path to a soft landing, we think the path gets narrower with each passing month of high inflation. Once inflation moderates—which we expect eventually—central banks can worry more about growth, as long as inflation expectations remain anchored. facebook linkedin twitter youtube email print