Global Markets Overview: December 2022

A recap of economic conditions in 2022; looking forward to 2023:

• High levels of spending growth in 2021 were supported by high levels of central bank and government COVID-related stimulus. When combined with widespread disruptions in the supply of commodities, goods, and workers, it has led to demand outstripping supply in most economies over the past 18 months.
• The resulting high inflation has seen aggressive rises in central bank policy rates over this year – the speed and magnitude of this tightening has been the biggest in the past 40 years.
• Our view moving into 2023, is that the main drivers of economic conditions in advanced economies will pivot from one of rising inflation and rising central bank policy rates to a significant slowing of economic activity.