Deutsche Bank researchers are the latest analysts to put a 25% decline in equities on the map, and they expect the U.S. to go into a recession by mid-2023.
A U.S. recession induced by central-bank efforts to curb inflation is likely to arrive by mid-2023 and trigger a sharp and “temporarily painful” decline in equities, according to Deutsche Bank researchers.“We see major stock markets plunging 25% from levels somewhat above today’s when the U.S.
In a note released on Monday, the researchers cited persistently high wage and price inflation in the U.S. and Europe driven by robust demand, tight labor markets, and supply shocks for their thinking. Based on the historical record of several major industrial countries since the 1960s, any time trending inflation has declined by 2 percentage points or more, such a decline has been accompanied or induced by a rise in unemployment of at least 2 percentage points.
Read: S&P 500 to bottom in the first quarter, creating a ‘terrific buying opportunity,’ says Morgan Stanley’s Wilson
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