The first half of 2023 was marked by continued economic uncertainty, having endured four U.S. bank failures, fears over debt ceiling negotiations, rising geopolitical uncertainty, and lingering concerns over inflation and rising interest rates. Despite the likely challenges still ahead, there are signs of a resilient economy: the S&P 500 had its 4th-best first half in the last 25 years, the labor market remains strong, consumers continue spending on big-ticket services and commodities, and corporate debt levels appear stable (J.P. Morgan). While the Fed decided against an additional rate hike at the recent June meeting, further tightening is possible in the months ahead, though at a slower pace than what’s been experienced over the last 16 months. Recession fears persist, but there remains hope for a soft landing, with marginal economic growth expected in the quarters ahead.
