The consensus is now bracing for a 2023 recession that tempers inflation and ends the Fed’s reign of tightening but also depresses corporate earnings, suggesting more downside for stocks’ valuation multiples. We’re more optimistic, expecting
We’re more optimistic, expecting no broad-based recession but a rolling one, no continued bear market in stocks but sluggish earnings limiting their upside. … Both scenarios hinge on inflation: If it remains persistently high despite having peaked, expect a broad-based recession and all that entails. If not, the 2023 outlook will be brighter. … Also: A look at data supporting both soft- and hard-landing scenarios. … And: What the Fed might do next.