Capital IdeasTM

Investment insights from Capital Group

Central Banks
The economy in 2023: Where we differ from market consensus
Jared Franz
Robert Lind
Stephen Green
China economist Based in Hong Kong
Jens Søndergaard
Currency Analyst

The wisdom of crowds can be powerful. But in times of heightened uncertainty, it can be helpful to understand potential risks.

At the moment, markets appear to be crystallising around a hopeful outlook for 2023. Asset prices suggest inflation will begin to subside quickly, the US Federal Reserve will become less hawkish and global growth will not be that much weaker than in 2022. However, monetary policy is fluid, geopolitical uncertainty is high, and strong labour markets are being offset by weakness in housing and other areas. Together, this allows for a range of possible outcomes.

There are four contrarian scenarios in which our economists think current market consensus, as reflected in asset prices, may not be the most probable outcome.

Jared Franz, for example, says the Fed will keep rates higher for longer, yet when the economy recovers, it will be stronger than prior rebounds. Meanwhile, Robert Lind argues that European policymakers will likely run looser fiscal policies and tolerate higher inflation. Stephen Green says the Chinese consumer will take time to rebound, and currency analyst Jens Søndergaard warns it is too early to call for the end of the US dollar’s bull run. 


Risk factors you should consider before investing:

  • This material is not intended to provide investment advice or be considered a personal recommendation.
  • The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
  • Past results are not a guide to future results.
  • If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
  • Depending on the strategy, risks may be associated with investing in fixed income, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.

Jared Franz is an economist with 18 years of investment industry experience. He holds a PhD in economics from the University of Illinois at Chicago, a bachelor’s degree in mathematics from Northwestern University and attended the U.S. Naval Academy. 

Robert Lind is an economist with 36 years of industry experience. He holds a bachelor's degree in philosophy, politics and economics from Oxford University.

Stephen Green is an economist at Capital Group, responsible for covering Asia. He has 18 years of investment industry experience and has been with Capital Group for eight years. He holds a PhD in government from the London School of Economics and a first-class honours degree in social and political sciences from Cambridge University. Stephen is based in Hong Kong.

Jens Søndergaard is a currency analyst at Capital Group. He has 17 years of investment industry experience and has been with Capital Group for 10 years. Earlier in his career at Capital, he worked as an economist covering the Euro area and the UK. Prior to joining Capital, he was a senior European economist at Nomura, a senior economist at the Bank of England and an assistant professor at The Johns Hopkins University. He holds a PhD in economics and a master’s degree in foreign service from Georgetown University. Jens is based in London.

Hear from our investment team.

Sign up now to get industry-leading insights and timely articles delivered to your inbox.

By providing your details you are agreeing to receive emails from Capital Group. All emails include an unsubscribe link and you may opt out at any time. For more information, please read the Capital Group Privacy Policy

Past results are not a guarantee of future results. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.