JPMorgan survey suggests inflation will fall in 2023

JPMorgan survey suggests inflation will fall in 2023

According to a survey released on Wednesday, most traders believe global inflation has peaked, while a potential recession has emerged as the main risk to markets this year.

44% of the 835 respondents predicted that inflation will decrease in 2023, according to JPMorgan's annual survey of institutional and professional trading clients. 37% of the price was predicted to be off by the end of the day.

The biggest group of traders in the study, representing 30% of those surveyed, placed the global downturn as their top concern, as asked which factor would have the most impact on markets this year. This was up from just 5% of respondents to the same survey in 2022, when JPMorgan's trading clients made the accurate bet that inflation would dominate the market mood for the rest of last year.

Scott Wacker, head of FICC e-commerce sales at JPMorgan said that inflation was the number one concern for the market for quite a while.

According to he, the concern for most traders is with high interest rates in response to inflation, and whether central banks have gone too far in their efforts to cool price rises.

The U.S. Federal ReserveFederal Reserve, which concludes its latest monetary policy meeting on Wednesday, is expected to raise benchmark borrowing costs by a quarter of a percentage point to a range of 4.5% -- 4.75%.

It would be the Fed's smallest hike in its 10 month tightening cycle since inflation moderated, although money markets are tipping the world's most influential central bank to keep raising rates until the summer.

In the euro zone, the European Central Bank is forecast to lift its main deposit rate by 50 basis points to 2.5%, even after data this week showed that the German economy unexpectedly shrank at the end of last year.

In Europe, where price rises are running at around 9%, the majority of JPMorgan's survey respondents believed inflation rates would decrease.

The survey showed that traders in the US, where headline consumer prices rose at a rate of 6.5% in the year to December, thought inflation would plateau from here.