Bank of America Global Research discusses the US economic outlook and the scope for a mild recession this year.
"Our economists expect a mild recession starting mid-2023 and Fed cuts to begin only in March 2024. For 2023, the market expects a much milder recession, with the Fed still hiking rate 1-2 more times before slightly cutting rates in second half of the year," BofA notes.
"While consensus has a bearish outlook for both US equities and the USD in 2023, stocks and the DXY on average both rallied during the historical precedents we examined, despite the growth shock and Fed rate cuts. For now, we still hold a bearish USD view for the medium term; 2023 playing out in line with leading indicator historical precedents would increase the upside risk to our bearish USD outlook," BofA adds.