RE:APOLLO: “The US economy is starting to reaccelerate .."Here's my personal view on interest rates, inflation, and recession in 2023:
The BOC and FED have each raised interest rates eight times in less than one year (starting in March 2022).
Each interest rate increase takes time to filter its way though the economy re. higher mortgage rates, higher interest rates on personal and business/company loans, etc.
It can take up to a year for the full effects of any given interest rate hike to be felt thoughout the entire economy, so I believe most of the interest rate hikes that have already been announced haven't had their full impact on economic activity yet.
Inflation will likely drop to around the 2 to 3% level the FED and BOC are targeting given the interest rate hikes, but I believe a recession will also take hold as there is too much debt out there with the full impact of rising interest rates still to be experienced by both consumers and businesses alike on both sides of the border.
Finally, I believe that a good part of the reason why stocks ran up so much from their COVID lows in March 2020 through to the end of 2021 / early 2022 is because the BOC and FED made a series of interest rate cuts along with injections of money into the economy to prevent a economic COVID disaster which made for both cheap debt for companies and GICs pay next to nothing in interest. Now you can get a one-year GIC that pays over 5% interest, so investors are much more likely to be in cash earning 5% than risk being in stocks at higher interest / borrowing rates.