Goldilocks in hiding as bears dominate Mackenzie outlook
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“Reaching the two% inflation goal stays the precedence for central banks, which can encourage them to maintain rates of interest excessive all through 2023,” Locke famous. “Consequently, bond yields will stay elevated, creating strain on customers and enterprise from greater rates of interest on money owed within the months forward.”
Secondly, threat belongings akin to equities are prone to be impacted by headwinds in line with a slowing economic system akin to weakened wage rises dampens shopper spending.
“Energy within the shopper sector and low unemployment have up to now helped to offset the impacts of excessive inflation and rates of interest, however progress has slowed, notably in Canada as excessive shopper debt is negatively impacted by elevated rates of interest,” stated Lesley Marks, CIO of Equities and Mackenzie Investments.
Lastly, the continued conflict in Ukraine has elevated the probability of a recession in Europe in 2024. In the meantime, China is about to rebound from its strict Covid lockdowns and assist increase rising economies.
Mackenzie additionally sees China driving demand for alternate options to the US greenback as reserve currencies.
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