January 1, Wall Street Strategists Make Their Predictions for 2022

Wall Street strategists think 2022 will be a bumpy ride, with the U.S. experiencing continued inflation amid an unpredictable global pandemic.

Until supply chain issues are resolved, inflation is here to stay.

According to the J.P. Morgan Asset team: “CPI inflation … should ease on average in 2022 as oil prices recede, supply chain difficulties diminish and government aid to low- and middle-income households dries up.”

On the bright side, strategists think companies’ capital expenditures are set for a comeback.

J.P. Morgan says that “as more consumer spending shifts to services, businesses will get a breather and restock inventories.”

But COVID-19 will continue to dictate unpredictable recovery patterns.

Bank of America’s chief investment office thinks emerging markets remain more vulnerable to economic shocks.

According to Axios:

A best-case scenario is one where "monetary policy tightens less than investors fear," while strong capital expenditure and improving supply chains and global health continue to push growth, according to Morgan Stanley, which has an above-consensus outlook of 4.7% global GDP growth for next year.

And a worst-case scenario would involve new variants slowing growth as supply chain bottlenecks drive inflation even higher, according to Bank of America.

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Wall Street predicts expensive, bumpy 2022