Fidelity International discounts market optimism for 2023

Soft landing off the cards

Financial markets are being overly optimistic about the direction of the economy, according to Fidelity International chief investment officer Andrew McCaffery, who suggests a soft landing is not on the cards.

"Markets want to believe that central banks will blink and change direction, negotiating the economy towards a soft landing," he said in an update. "But in our view, a hard landing remains the most likely outcome in 2023. The previous norm of central bank 'whatever it takes' intervention during the financial crisis and the pandemic is going or has gone." Inflation remains an immediate and future concern for markets and households alike. Today (16 November), inflation surprised on the upside with the official rate of the consumer price index hitting 11.1%. UK energy and food prices ...