BlackRock says "get ready for a recession unlike any other"

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A worldwide recession is just around the corner as central banks boost borrowing costs aggressively to tame inflation — and this time, it will ignite more market turbulence than ever before, according to BlackRock.

and the new regime of increased unpredictability is here to stay, according to the world's biggest asset manager.

That means policymakers will no longer be able to support markets as much as they did during past recessions, a team of BlackRock strategists led by vice chairman Philipp Hildebrand wrote in a report titled 2023 Global Outlook.

"Recession is foretold as central banks race to try to tame inflation. It's the opposite of past recessions," they said. "Central bankers won't ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. Equity valuations don't yet reflect the damage ahead."

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Still, the stock market hasn't yet factored in the potential magnitude of the impending economic downturn, the strategists said.

"We don't think equities are fully priced for recession," they added. "Corporate earnings expectations have yet to fully reflect even a modest recession. This keeps us tactically underweight developed market equities."

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