When Yogi Berra famously said it’s difficult to make forecasts, especially about the future, he probably didn’t have financial market analysts in mind.
Also, stock markets usually go up, so down years are by definition surprises. However, this is precisely where clients might reasonably expect their well-remunerated investment bank and fund management experts to earn their corn. So is their optimism, which may explain why analysts almost always predict the year ahead will be a good one. This year was no exception.
But price pressures were already a clear and present danger this time last year - global supply chains were clogged up, and Fed Chair Jerome Powell and Treasury Secretary Janet Yellen said within days of each other that inflation was no longer ‘transitory’. That was despite the fact that respondents correctly said the two biggest risks for 2022 were “higher-than-expected inflation” and “an aggressive Fed tightening cycle.”
“If you were any of those four people out of 750 please email me to tell me your predictions for the next 12 months,” Reid quipped in a note on Wednesday.