Every year, Wall Street’s top banks publish lengthy reports laying out what the next year could hold for investors, making predictions for economic growth and the trajectories of stocks and bonds.
Some years, the prognostication is more successful than others. The pandemic has made the exercise particularly difficult. Early estimates for 2020 had to be quickly tossed out as countries around the world entered lockdowns and shuttered their economies. Forecasts for 2021 largely missed the sharp rise in inflation that now dominates discussions.
So what’s on tap for 2022? Wall Street admits that on many fronts, it’s not quite sure.
This just in: Fresh reports from Morgan Stanley and Goldman Sachs note that a significant degree of economic uncertainty remains — particularly when it comes to inflation and how policymakers could respond.
In research published Sunday, Morgan Stanley said it thinks US inflation will move “decisively lower” next year while remaining above the Federal Reserve’s 2% target.
The bank’s team of strategists predicts as its central scenario that the Fed will still hold off on hiking interest rates until 2023. But they can’t be sure.
