2023 has seen a major improvement in market sentiment compared with 2022’s annus horribilis. Even though the macro outlook remains uncertain, inflation has made big strides towards the 2% target that most central banks have set. This has led to more stability in markets and a drop in volatility. The jury is still out on whether central banks have managed to create a soft landing, or whether the delayed impact of rate hikes will lead to a recession in 2024. The consensus now is that inflation is sufficiently close to target to put any further rate hikes on hold for the time being. Instead, the debate has shifted to when and how quickly Central Banks will have to cut rates in 2024.

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