3 2023 OUTLOOK A recession is likely in 2023, but investors should look beyond it and position for recovery in a new investing environment shaped by higher rates, lingering inflation, and hawkish central banks. KEY TAKEAWAYS A mild global recession is likely, with a recovery expected 1 toward the end of 2023. 2 Inflation moderates but remains elevated above the post-global financial crisis level of near 2%. 3 The Federal Reserve (Fed) is likely to hike and hold due to elevated inflation in the services sector. Bonds are back as higher yields can now provide attractive 4 income and a ballast in portfolios. A new equity regime emerges as the era of ultra-low rates 5 and enhanced liquidity recedes and investors face a new world of higher borrowing costs and lingering inflation.