Private consumption and investment are likely to slow in the coming quarters, particularly in more cyclical and interest rate sensitive sectors.
This should, however, take pressure off wages and inflation and allow interest rates to fall again. In the meantime, investors will likely have to contend with slower growth, sticky core inflation and interest rates that have to stay higher for longer.
The most critical immediate question for investors is how severe the slowdown will be and what that might mean for company earnings and broader company fundamentals.
Looking at data back to the 1920s, deep recessions have always been accompanied by systemic financial crises. And given the crucial role banks have historically played in creating credit, this shouldn’t come as a surprise.
My latest analysis published on the ICG website considers:
- The truly dramatic changes of past years
- What does this mean for the investment environment?
- What are the biggest risks and opportunities?
- What does this mean for private markets?
- Where do we go from here?
While companies – private and public – may face a more difficult operating environment in the coming quarters, we think private market investors are particularly well positioned.
Please watch my video or read my report.