In late 2022, with the threat of a recession in the U.S., among other economies, we anticipated that 2023 would be a year of corrections and balance.Now with conflict in both Ukraine and the Middle East and an upcoming election year, there is no shortage of possibilities, but there has indeed been some correction recently. The U.S. economy has seen more of an economic slowdown rather than a full-blown recession. Ellen Zentner, Morgan Stanley’s Chief U.S. Economist, says, “We continue to look for a soft landing this year, but that depends on how much tighter credit conditions for households and businesses weigh on economic activity.”


With real pressure felt at the gas pumps and the grocery stores this year, there has been a lot of talk of inflation. Most people’s memories only consider the last 20 years, and the last 20 years have been a declining rate environment. Many people don’t remember the 80’s when inflation was over 10% for multiple years. At the close of September, the inflation rate was at 3.7%. After the economic crisis of 2009 until 2020, the federal funds rate was maintained around 1.5%. As the COVID-induced environment corrects itself, we anticipate a return to something more like 2000 to 2010, as opposed to the environment immediately preceding COVID. This would mean interest rates of 3.5% to 5.5% for the next decade or so.

Stabilizing Unemployment and the Business Environment

Unemployment also points to a stabilization. The unemployment rate was 3.5% in February 2020 and spiked to 14.7% in April 2020. It has been under 4.0% since February 2022 (3.9% for October 2023). “The labor market was sprinting last year and now it’s getting closer to a marathon pace,” said Nick Bunker, head of economic research at job site Indeed. “A slowdown is welcome; it’s the only way to go the distance.”

Looking Ahead

As always, new technologies will emerge. With investments being more scrutinized, and without a pandemic forcing the timeline for decision making, we see business leaders being more pragmatic about how and when they integrate these technologies.

There has been steady growth on all major indices (DJIA, S&P 500, NASDAQ) in the past year. In the larger picture, the U.S. dollar remains strong and that will continue. U.S. markets will remain the blue-chip markets of the world.