Monthly outlook

Our investment and economic outlook, October 2023

October 20, 2023

A bar graph depicts Vanguard estimates of the declines in euro area consumption resulting from a 4% ECB deposit facility rate. The drag on consumption is estimated for each quarter between the third quarter of 2022 and the third quarter of 2026. The estimates rise steadily from a bit more than zero at the outset to about negative 1% in the third quarter of 2023. The drag on consumption is continue rising for another two quarters, peaking near negative 1.5% in the first two quarters of 2024 before receding steadily to about negative 0.5% at the end of the forecast horizon.
A table presents Vanguard’s expectations for the ranges of annualized returns, as well as median levels of volatility, for nine classes of equity securities. All the projections are based on the June 30, 2023, running of our Capital Markets Model. The projections are: U.S. equities, 3.7% to 5.7% returns and 17.0% volatility; U.S. value, 4.6% to 6.6% returns and 19.3% volatility; U.S. growth, 0.8% to 2.8% returns and 18.2% volatility; U.S. large-cap, 3.7% to 5.7% returns and 16.7% volatility; U.S. small-cap, 4.3% to 6.3% returns and 22.5% volatility; U.S. real estate investment trusts, 4.2% to 6.2% returns and 20.0% volatility; global equities excluding the United States (unhedged), 6.4% to 8.4% returns and 18.2% volatility; global ex-U.S. developed markets equities (unhedged), 6.1% to 8.1% returns and 16.5% volatility; and emerging markets equities (unhedged), 6.2% to 8.2% returns and 26.2% volatility.
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