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Retest Risks Should Create Longer-Term Opportunities

Source: Picton Mahoney Asset Management
Publish Date: Jan 12, 2023
Attention is steadily shifting from inflation concerns to recession risks. Inflation seems to have peaked, largely due to collapsing goods inflation, and recession probabilities have increased considerably. We expect global markets to retest their 2022 lows in the first half of the year, which could force central banks to back off their tightening policies, setting the stage for the next cyclical upturn. The Fed may increasingly find itself in a bind: trying to tighten its way out of a supply-driven inflationary environment with the blunt instrument of monetary policy.

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