Most traders believe global inflation has peaked, while potential recession has emerged as the main risk to markets this year, according to a survey released on Wednesday.
JPMorgan’s annual survey of institutional and professional trading clients found that 44% of the 835 respondents predicted inflation will decrease in 2023. A further 37% forecast that price rises would level off.
Asked which factor would have the most impact on markets this year, the largest group of traders in the study, representing 30% of those surveyed, placed a global downturn as their top concern.
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 remainder of last year.
“Inflation was the number one concern for the market for quite a while,” said Scott Wacker, head of FICC e-commerce sales at JPMorgan.
“The concern for most traders is with high interest rates in response to inflation,” he added, and whether central banks had “gone too far” in their efforts to cool price rises.
The U.S. Federal Reserve, which concludes its latest monetary policy meeting on Wednesday, is widely expected to raise benchmark borrowing costs by a quarter of a percentage point to a range of 4.5%-4.75%.
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