7 Market and Economic Predictions for 2023: Northern Trust

Northern Trust Asset Management expects ongoing but tempered volatility in 2023 as worries over inflation and interest-rate hikes give way to lower inflation, a pause in rate increases and a weak global economy.

“While we believe there is downside risk from fundamentals, we see upside potential from likely improved investor sentiment,” Northern Trust Chief Investment Officer Angelo Manioudakis said in a statement this week.

“Financial markets will have to balance the immediacy of disappointing global growth against the backdrop of greater certainty on central bank policy, a reduction in interest-rate volatility and the potential of a return to growth later in the year.” 

The firm, which has $1.2 trillion in assets under management, built its 2023 outlook on themes from its five-year capital markets view, which include slower growth, inflation recalibration and monetary drought, i.e., less monetary support, in coming years.

The firm said it is balancing downside risks with the potential for an improving investment outlook as 2023 progresses. 

Here’s a look at the firm’s economic and market predictions for 2023, which it forecasts to be “a pivotal year.”