Skip to main content

MUFG issues capital markets outlook for 2023—'The  New Macro Supercycle’

  • Anticipates most highly telegraphed global series of mild, rolling recessions in decades
  • Looks to 2024 as likely timing for broad-based, sustainable recovery
  • Foresees ‘tale of two cities’ in credit markets

New York, NY (January 23, 2023) – Mitsubishi UFJ Financial Group’s (MUFG’s) Capital Markets Strategy team released its 2023 outlook titled “The New Macro Supercycle” providing a forward-looking perspective on the global economy, monetary policy and markets in the next 12 months—and highlighting prevalent themes driving the worldwide economic environment in the decade ahead.

“The ‘Great Moderation’ of low inflation and volatility during the past 40 years is over,” says Tom Joyce, head of Capital Markets Strategy. “Following the ‘polycrisis’ of 2022 stemming from concurrent geopolitical, energy and economic shocks, we have entered a more clearly defined period for economies and markets.” 

Joyce adds that although the prior year was challenging, the recession fears of 2023 are likely less concerning and more greatly reflected in asset prices than the unexpected inflation and U.S. Federal Reserve tightening of 2022. In addition, he says, we begin 2023 with positive surprises across the world’s three largest economies: rapidly declining US inflation, reopening in China and lower energy prices from warm winter weather in Europe.

Key takeaways

The Capital Markets Strategy team’s key observations span five of the following areas:

  1. The new “macro supercycle”: Joyce and his team highlight dozens of new, pervasive themes driving the global economy and markets in the decade ahead that include a transition to quantitative tightening, persistently higher inflation, greater instability, shorter economic cycles, more rigorous investor scrutiny, long-term supply constraints for commodities, fragmented globalization, structural shortfalls in labor markets, and an eastward shift in the global economy’s center of gravity.
  2. The global economy: The team anticipates the most highly telegraphed series of mild, rolling recessions in decades, and looks to 2024 as the more likely timing for a broad-based, sustainable global recovery.
  3. Global monetary policy and U.S. public policy: In the team’s view, the historic monetary tightening of 2022 will be felt more in 2023, since monetary policy operates with a 12–18-month lag. In the United States, with a split Congress and narrow majorities in both houses, the team expects very limited fiscal support and more complexity in regular-way legislation in 2023.
  4. The credit markets: The team foresees a “tale of two cities,” observing that, on one hand, investors enter the new year with a clean slate to put money to work in strong corporate balance sheets that offer more attractive yields than at any time since the global financial crisis of 2008–2009. Yet the team also notes that, as the year progresses, decelerating earnings and margin compression will put pressure on a credit cycle that is poised to turn. Against this backdrop, the team believes that pre-funding strategies are especially important in 2023.
  5. The global financial markets: The team recaps the research of MUFG’s U.S. Macro Strategy team with views for the year ahead that include bullish U.S. Treasury yields, bearish credit spreads, a moderating U.S. dollar, and divergent paths for commodities as a result of mixed pressures—both upward and downward—on different commodity groups by region, such as natural gas in the United States and Europe.

The full report can be accessed here or by using the following link:

Press contact:

Assaf Kedem
D: +1 212-782-4926
M: +1 917-685-4388

About MUFG and MUFG Americas 
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,100 locations in more than 50 countries. MUFG has nearly 160,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.  

MUFG’s Americas operations, including its offices in the U.S., Latin America, and Canada, are primarily organized under MUFG Bank, Ltd. and subsidiaries, and are focused on Global Corporate and Investment Banking, Japanese Corporate Banking, and Global Markets. MUFG is one of the largest foreign banking organizations in the Americas. For locations, banking capabilities and services, career opportunities, and more, visit