Blackrock Warns Of Unprecedented Recession For 2023, Bull Markets Won’t Return – Finance Bitcoin News
Blackrock, one of the largest asset management companies in the world, has warned that 2023 will be a year of recession unlike other recessions in the past. As part of its recently released Global Outlook 2023 report, Blackrock states that a new economic playbook is required in a world defined by a supply-side economy and high levels of inflation.
Blackrock predicts recession and persistent inflation
Blackrock, an asset management and investment company, has presented its predictions for what the next year may bring to the financial markets. The company, which has an estimated $8 trillion in assets under management, predicts a period of recession caused by central banks’ policies aimed at controlling inflation. But according to its 2023 Global Outlook reportwill this recession be different from past recessions.
The report explains:
Recession is predicted as central banks race to try to tame inflation. This is the opposite of previous recessions: loose policy is not on track to help support risk assets, in our view.
Furthermore, Blackrock predicts that stocks are likely to suffer more as they are not priced into this recession as the economic damage caused by central banks’ actions is still building. When it comes to inflation, the report states that central banks will need to stop tightening policy before they reach their intended inflation targets and cause economic crises.
On this, the report concludes that “even with a recession coming, we think we’re going to live with inflation.”
Joint Bull Markets Not on the Horizon
The firm believes that the new economic configuration requires new ways of meeting the markets, as the old playbook of “buying the dip” will not be effective, as there needs to be an ongoing reassessment of how the dynamic policy being pursued creates economic damage.
As a result, the report states:
We do not see a return to conditions that will sustain a common bull market for stocks and bonds of the kind we experienced in the previous decade.
The firm has also commented on crypto and cryptocurrency companies in the past. Larry Fink, CEO of Blackrock, listed that he believed that most cryptocurrency companies would not survive the demise of FTX, formerly one of the largest cryptocurrency exchanges on the market. However, he acknowledged that blockchain technology will be important as a tool to help tokenize securities as part of next-generation markets.
What do you think of Blackrock’s market predictions for 2023? Let us know in the comments section below.
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