BlackRock warns of an unprecedented recession in 2023

BlackRock, an asset management and investment firm, has presented its forecasts for what next year may bring to financial markets. The firm, estimated to hold $8 trillion in assets under management, predicts a recession caused by central bank policies aimed at controlling inflation. However, according to its 2023 Global Outlook report, this recession will be different from previous downturns.

The report explains:

Recession is foretold as central banks race to try to tame inflation. It's the opposite of past recessions: In our view, easy policy is not on its way to help support risk assets.

In addition, BlackRock predicts that stocks will likely suffer more because they aren't priced for this recession, as the economic damage caused by central bank actions keeps growing. On inflation, the report says central banks will have to stop tightening policy before they reach their inflation targets and trigger economic crises. On that point, the report concludes that “even with a recession approaching, we believe we will be living with inflation.”

A market rally is not on the horizon

The firm believes the new economic landscape calls for new ways of approaching markets, as the old "buy the dip" playbook won't work, since there has to be a constant reassessment of how the aggressive policies being pursued are causing economic damage.
As a result, the report says:

We don't see a return to conditions that would sustain a joint bull market in stocks and bonds like the one of the past decade.

The firm has also given its view on crypto and crypto companies in the past. Larry Fink, BlackRock's CEO, said he believed most crypto companies would not survive the collapse of FTX. However, he acknowledged that blockchain technology will be important as a tool for the next-generation market.

Source: news.bitcoin.com