The world’s top banks have released a set of staggering predictions about the probable economic environment in 2023.
2022 brought unabated financial turmoil, and the leading banks have predicted that this year won’t be much different. Nonetheless, there are a few glimmers of hope on the horizon. After thoroughly examining the macro outlooks released by six major institutions for 2023, various diverse prognoses have been uncovered.
As JPMorgan foresaw, this year may be a difficult one economically; however, it also predicted that the markets would rebound and perform better. Based on the current economic forecast, inflation is anticipated to stabilize “as the economy decelerates, employment prospects deteriorate, supply chain issues continue to be addressed, and Europe effectively diversifies its energy resources.”
Despite this, experts anticipate that inflation will remain higher than the central bank’s expectations.
JPMorgan believes that the most probable outcome of this situation is a mild recession in developed economies, though there remains an insignificant possibility of replicating the 2008 global financial crisis. This is largely attributed to the expected lack of housing stock that would prevent prices from plummeting drastically.
According to Goldman Sachs, global growth is expected to slow down this year as Europe enters a recession and China’s Covid recovery proves unstable. This will result in an overall low of 1.8% growth worldwide.
The economic outlook for the US is improving, with core PCE inflation slowing from its present 5% rate to a projected 3% by late 2023. It’s anticipated that unemployment will rise only slightly, around 0.5%, during this time period as well.
One of the most troubling prognostications comes from BlackRock. The 2023 global outlook report declared the end of “The Great Moderation,” a period that lasted for forty years and was characterized by generally stable economic activity and inflation.
As an ever-changing macro and market volatility takes its toll, a looming recession is unavoidable. Central banks have inadvertently initiated tightening fiscal policies to quell any potential inflation. The bank encourages people to reevaluate their investment strategy in light of recent events, as equities could take a further plunge. Moreover, inflation is predicted to be around 2%, and it doesn’t seem that the boom times of past bull markets will ever return. By embracing this new playbook, individuals can look forward to better financial security through turbulent economic conditions.
Fidelity International predicts that 2023 will experience the repercussions of the Ukrainian war alongside a change in global monetary policies as central banks shift their emphasis from bolstering markets to curbing inflation.
In her preface, Anne Richards, Chief Executive Officer of the central bank, noted that they were fretting over supply-side pressures that could lead to inflation and push up wages and prices. Ms. Richards warned that, as the central banks continue to restrict their financial climates, the risk of an economic downturn heightens and could lead to a harsh recession along with weak labor conditions. However, she anticipates that the supply chain strains felt in the last year will be alleviated as air, ocean, and ground shipping costs decline while Covid-related backlogs dissipate.
According to Apollo Global Management, evidence of deflation is apparent in the sudden drop in container freight rates. Though inflation is trending downward, the process will be slow.
Genevieve Roch-Decter, a well-known finance journalist and analyst, tweeted her summary of the Apollo Bank’s forecast, noting: “It usually takes two years at most to return inflation levels back to 2 percent after reaching its peak.” “Notably, the quality of excellent subprime credit has diminished but not enough to precipitate a major financial meltdown,” she declared.
Roch-Decter further noted that Deutsche Bank estimates inflation to slow substantially, with the US Consumer Price Index projected at 4.1%. She further stated that industry experts are confident that the stock market has already considered current inflation levels. If these numbers continue to drop, equities will experience a promising beginning in 2023.
As per HSBC’s predictions, the global economic deceleration will remain a powerful obstacle for stocks. Investing in overweight assets, such as private companies, real estate, and hedge funds, can result in greater diversification of higher-rated bonds.
As stated by the outlook, it’s more beneficial to tackle rate risk, as opposed to cyclical volatility, considering that the growth cycle is less tumultuous than the rate cycle. Despite the cyclical forecast being a major obstacle, we are beginning to observe positive signs in terms of interest rates.
Struggling to Keep Up: Exploring Solutions as Egg Prices Skyrocket
Erin Davis of Huntington Township, Pennsylvania, is a dedicated chicken keeper and takes great pride in providing her family with fresh eggs from her flock. Erin began keeping chickens as an investment for her family in the summer of 2019 and invested around $700 for feed, materials for the coop, and four hens: Sugar, Cookie, Dorothy, and Blanche. Her sons Cade (age 5) and Beau (10) were excited to help out with tending to their new feathered friends. After seven months of waiting patiently, they were delighted when their first egg was laid on December 14th.
Before beginning her own backyard chicken operation, Erin had to ensure that she complied with local zoning laws. She was relieved to find that although keeping chickens was not legal when they lived in Wilkes-Barre, it was allowed in Huntington Township due to its more rural character. Now every day, they can expect to reap between three and six eggs from these hardworking birds.
Not only does keeping chickens offer the reward of fresh eggs, but there are many other benefits as well. Knowing what goes into their food is a huge plus for Erin and her family, who often provide leftovers such as carrots, cauliflower, or spinach leaves for their feathered friends to enjoy. They also provide free range time daily to the hens so that they can roam about, which makes them happy and keeps them healthier too. Even some of the more dramatic moments involving hawks trying to make off with one of the brood have served to heighten their appreciation for these valuable members of their household.
The Davis’ experience is shared by Dakota and Kaili Bowman, who run Bow & Branch Chicken Ranch near Shickshinny Lake in Pennsylvania as well. The couple owns 35 chickens – originally purchased as chicks and ones that Kaili rescued when previous owners no longer wanted them. They look forward to increasing egg production in the coming springtime this year, when there will be a rainbow array of shells from pink through green, turquoise, and white available! To make delicious local farm-fresh eggs available more widely, they plan on opening an egg stand at 57 Cherokee Drive by the end of March, where customers will be able to pick up a dozen or eighteen eggs at great prices; $3 per dozen or $4 for 18 respectively – much cheaper than store-bought! Not only do locally grown farm fresh eggs taste better, but it’s also nice knowing exactly where your food comes from! Plus, Dakota & Kaili are happy to share tips if anyone wants information on raising their own chickens themselves – through potential keepers must realize how much work goes into taking care of these animals properly!
Even large businesses dealing with large quantities of eggs, like The Avenue Restaurant & Catering, are feeling the pinch due to rising costs. Especially during high-demand seasons like Easter when many people use extra eggs, making sure supplies don’t break easily is one added challenge faced by producers today! Ultimately everyone involved wants what’s best for consumers, however – accessibly priced tasty food options produced sustainably – so despite all the challenges, it’s nice that folks like Erin Davis & Dakota & Kaili Bowman have stepped up to address demand while putting quality & sustainability first – something we should all appreciate!
Ahead of the AFC Championship, KC Bakery and Boutique are Preparing for a Surge in Business this Week
The week leading up to the AFC Championship is a time of celebration for local businesses in Kansas City. KC stores are stocking their shelves with Chiefs merchandise in anticipation of the big game, and customers are lining up to get their hands on items that will help them join in the festivities.
Robert Duensing, the Best Regards Bakery and Cafe owner in Overland Park, knows that his business is always busy this season. They specialize in making cookies decorated as Patrick Mahomes, Andy Reid, and Isiah Pacheco jerseys, which fly off the shelves before each game. Last year, however, there was a bit of a dip in sales during the later stages of playoffs until they reached the AFC Championships – an effect Duensing jokingly refers to as “the New England effect,” believing fans got so used to them reaching this point that it became taken for granted. He encourages fans to remain engaged in the present instead; as Duensing puts it himself: “As a fan, I’m excited about the prospect [of going to the Super Bowl], but as a business, we don’t give it one ounce of thought” – their focus lies completely on getting through this week’s demand first! This weekend he expects sales between 2000-3000 cookies alone – no doubt an impressive figure!
On top of bakeries celebrating this season’s success, local boutiques such as Shop Local KC have also seen a spike in demand. Owner Katie Mabry van Dieren has her shop in two locations (one in Leawood and one in Midtown), which stock everything from Chief-themed earrings and hats to stickers and shirts – all made by Kansas City locals! These items have been her best sellers by far, proving her belief that when Kansas City does well, everyone does well. Katie has also commented on how she never expected sports to have such an effect on her business: “I never thought sports would have such a big effect on us…Kansas City loves Kansas City, so everything with Kansas City written on it always does well because I think we just have pride here”.
So while we wait with bated breath for Sunday’s game against Tennessee Titans, let us not forget that all those delicious snacks at our Superbowl parties are thanks to small businesses like Best Regards Bakery and Cafe and Shop Local KC who put so much hard work into supplying us with our Chiefs memorabilia!
Microsoft’s Dismissals Show Clear Departure from XR Goals
Devastatingly, the teams responsible for developments such as HoloLens, AltSpaceVR, and MRTK have been laid off.
Microsoft’s announcement of 10,000 job cuts shocked many, representing nearly 5% of the company’s workforce. While current and former employees have been vocal about their frustrations on social media platforms, there has been a particular interest in understanding why certain business areas have seen significant job losses.
Microsoft CEO Satya Nadella has long espoused the importance of the ‘metaverse’ and how it will shape consumer and work lives in the future. One such area is the virtual, augmented, mixed, and extended reality (XR) space. Despite this, it appears that Microsoft’s XR ambitions may be faltering, with reports of teams involved in projects like HoloLens, AltSpaceVR, and MRTK (Mixed Reality Tool Kit) being dissolved entirely.
HoloLens has been subject to various refocusing efforts since its inception, as well as the controversy surrounding its chief architect Alex Kipman stepping down from his role just a few months ago. There have also been reports that suggest HoloLens failed US military trials which could mean limited resources available to further develop the project. Additionally, Microsoft decided to end its support for MRTK even though version 3 was due to launch in February 2023. This open-source project was designed to help developers by providing support for platforms such as Microsoft HoloLens 2 and Meta Quest. Although MRTK is still open-source, community groups may be able to continue development without official support from Microsoft.
Microsoft’s 2017 acquisition of AltSpaceVR, with plans to create ‘Microsoft Mesh’ as a successor, is yet another loss in the job cut casualties. Unfortunately, there are still queries concerning how extensive these plans will be, considering that entire teams behind other projects have been laid off or disbanded altogether. Despite this hurdle, Microsoft remains dedicated to its XR goals and future visions.
It is difficult to gauge whether this move signals another Windows Phone moment for Microsoft, where they are forced into strategic withdrawals due to failing competition, or if their XR strategy simply needs clarification and more resources invested into it at a later stage. The BUILD developer conference in May might provide us with more insights regarding the changes made by Microsoft’s latest round of layoffs and a clearer picture of what the new XR strategy may entail.