Outlook on the United States: July 2023

Lazard's Outlook series provides a forward-looking view, over the short, medium, and/or long term, of asset classes, sectors, regions, or countries from the view of Lazard Asset Management. In this edition, LAM portfolio managers share their outlook for the United States in Q3 2023. 

Summary

• The mood is noticeably brighter entering the second half of 2023. The banking crises and default fears that defined last quarter are fading from view, but significant uncertainty remains.
  
  
• Pressure on regional banks — especially those unprepared for higher interest rates or those with inadequate risk management processes — could create ongoing ripples through the economy. Increased regulation will likely create a tighter lending environment, which would have negative implications for the country as a whole.
  
  
• The Federal Reserve remains focused on taming inflation, which is still far above its 2% target. A pause in rate hikes this quarter is possible, but the longer-term trajectory remains largely unclear.
  
  
• The labor market does show signs of softening. A declining quit rate and increased immigration are both helping to cool wage growth, which in turn could help tame inflation, though it could take at least six months for these effects to play out.

Click here to read our Outlook on the United States for Q3 2023.