Guide to the Markets
Macro overview
It is extraordinary how the market narrative swung over the course of 2023. Coming into the year the predominant view was that we were stuck in the grips of 1970s-style stagflation. With central banks slamming on the brakes it is no wonder so many, ourselves included, expected a recession. That is usually what happens when interest rates rise so sharply.
Exhibit 1: Usually monetary tightening causes recessions
Source: Federal Reserve, LSEG Datastream, J.P. Morgan Asset Management. Periods of recession are defined using US National Bureau of Economic Research (NBER) business cycle dates. Data as of 15 November 2023.
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