Back in March 2022 when the Fed embarked on its second most aggressive hiking cycle ever, we warned that it would not be the first hike that created risk, but that the risks would probably surface after the Fed had delivered its final hike. That last hike appears to have happened: so where are we now? With inflation down and economic activity re-accelerating, the Fed seems set on maintaining rates at current cyclical highs for longer than the market had expected and hoped just a few weeks ago. Despite the abrupt departure from years of zero rate policy, the economy

In Fathom’s Global Outlook, Spring 2023, finalised in early March shortly before the failure of Silicon Valley Bank, we labelled our single most likely scenario ‘Recession postponed’. With the latest macroeconomic data much stronger than one might expect if a recession were imminent, and yet with an inverted yield curve, combined with historical precedents suggesting a recession would be hard to avoid, advanced economies appeared to be having a Jekyll and Hyde moment. We concluded that the euro area and UK were likely to enter recession in the first half of this year, with the US joining them in the