Where have we been… Where are we now?

2023 emerged as a year of resilience and unexpected positive turns, defying the new normal of higher interest rates, which were expected to exert pressure on the economy and markets. Following a challenging 2022, the consensus among economists leaned heavily towards the anticipation of a recession within the year. Wall Street’s S&P 500 forecasts mirrored this caution, spanning a conservative range from 3,675 to 4,500, with a median target near 4,000, signaling minimal growth expectations. This pervasive pessimism was largely fueled by the aggressive interest rate hiking cycle implemented by the Federal Reserve in a bid to curb decades high inflation. Monetary policy adjustments, coupled with ongoing concerns over consumer financial stability amid persistent inflation and market volatility, set a cautious tone for the year. In addition, central bank intervention, key economic indicators such as the yield curve inverting, a regional banking crisis, and increasing geopolitical tensions amplified uncertainty.