Midyear Outlook 2022

First Republic Bank
July 13, 2022

What’s Important:

  • Macroeconomic Outlook: The likelihood of a global recession has risen over the first half of 2022 as economic data has weakened.

  • Equities: Global earnings estimates will come down, but not as rapidly as most investors expect. We believe that current EPS estimates are overly optimistic and will be revised considerably lower.

  • Fixed Income: Persistently higher inflation will lead central banks into action this year as all major central banks are poised to reduce accommodation via raising policy rates and ending quantitative easing programs.

  • Financial Markets: A more aggressive Fed that is moving rates higher faster, slowing growth and high inflation leaves a more nuanced opportunity set for the second half of 2022. Higher rates will weigh on all asset classes, some more than others.

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