Vanguard lays out a 2023 macro roadmap centered on bringing inflation down—even at the cost of slower growth. The paper details why policy tightening points to a global recession base case, how inflation normalization may take until 2024–2025, and what that means for long-term asset returns.
Vanguard economic and market outlook for 2023: Beating back inflation
Vanguard
Research
61 Pages
Key Takeaways
Recession base case: Tightening, weaker trade, and energy shocks imply a global recession in 2023 across most major economies.
Bond return reset: Higher starting yields lift 10-year bond return expectations to roughly 4%–5% for U.S. and international markets.
Non-U.S. equity edge: 10-year return outlook: non-U.S. developed 7.2%–9.2%, emerging markets 7%–9%, vs U.S. 4.7%–6.7%.
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