European markets are heading for a mixed open Wednesday as investor sentiment remains uncertain regarding the global economic outlook.
A recession probably won't start now until later in 2023 as consumer spending has been stronger than expected and the Federal Reserve eases up on the intensify of its interest rate hikes, according to Bank of America.
"We push back the timing of our outlook for a mild recession in the US economy by about one quarter given durability in consumer spending on account of strong labor markets, excess saving, declining energy prices, and easier financial conditions," the firm said in a client note. "That said, we think the headwinds will lead consumers to reduce spending and push the saving rate higher as the year progresses.
That puts the recession into the second quarter, driven by a an investment-led slowdown leaking to consumer spending. After pushing its benchmark borrowing rate up by 4.25 percentage points in 2022, the Fed is expected to ease back, with a 0.25 percentage point increase in February. That is forecast to be followed by additional quarter-point increases in March and May.European markets: Here are the opening calls
European markets are heading for a mixed open Wednesday as investors remain uncertain on the economic outlook, a topic high on the agenda at the World Economic Forum in Davos this week.
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