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Unprecedented Post-COVID Economy Examined

CCEDC Hosts 19th Annual Economic Outlook

150 business executives and personal investors gathered Friday to hear expert insights on the local, national and global impacts of an unprecedented post-COVID economy at the Chester County Economic Development Council’s 19th Annual Economic Outlook. 

The must-attend suburban business event was held at Penn State Great Valley and featured President and CEO of Key Financial, Inc. Patti Brennan, CFP, who was named a Hall of Fame Advisor by Dow Jones & Company’s Barron’s, as well as economic specialist Dianne P. Manges, CFA, Director/Senior Investment Advisor for Truist Foundations & Endowments Specialty Practice. 

“2022 was the year of surprise,” said Brennan, noting Russia’s invasion of Ukraine and supply chain issues continuing longer than anticipated. “As a result, inflation spiraled up quickly and the Federal Reserve had to be as aggressive in fighting inflation as it was in fighting the impact of COVID during the global shutdown.” 

Brennan notes that 40% of inflation measurements are housing related. Since there is a 12- to 18-month lag in this data being included in CPI, we’re now dealing with the underlying inflation of 2020 and 2021 instead of what the data reflected back then. Supply chain issues are not back to pre-pandemic levels, but they are getting better, and an aggressive Fed policy is having its impact as well. She anticipates inflation will continue to come down in 2023.

“The final surprise of 2022 was how the bond market responded to rising rates,” Brennan said. “Since the Great Depression, we’ve only had three years where the bond market has been negative. Until last year, there has never been a year where the bond market was down double digits, yet we saw a loss of 13% in a bond index! Surprises move the economy and the markets negatively. It’s okay to be surprised, but we can be prepared for the surprises. Surprises can be positive ones, too, and it’s important not to miss out on those. Volatility is one thing; many investors will never recover from opportunity cost.” 

Brennan said one thing that wouldn’t be a surprise is a recession. “It’s the most expected recession ever. Businesses and consumers have been preparing for it, so the damage may not be as severe. The numbers are showing that the American consumer has never been in better shape heading into a recession, and corporations also have very strong savings on their balance sheets. If we end up in a recession, we’re in good shape fundamentally to weather that storm,” Brennan said.

Manges said, “While recession risks for the next 12 months have risen sharply, in the U.S., a recession is not necessarily ‘baked in.’ Clearly, we have the tightest global monetary policy in 40 years, from the Fed to minor and major central banks tightening to fight inflation after a massive stimulus. But consumer spending is expected to be quite strong in 2023 and the labor market is tight. The American consumer has the potential to keep us above water.”

While concerns about Ukraine and China are top of mind for many investors concerned about recessionary pressures and sluggish growth, Manges pointed out that, together, the U.S. and Europe make up half of the global economy and will be the driving force for gauging health of the economy and policies in 2023. She’s cautiously optimistic about China’s President Xi Jinping beginning a third term and delivering GDP growth over 5%. “He’s aggressive and competitive. If he can get China back on firm footing, I would not be surprised to see some growth measures coming out of China. China could go either way, dependent upon President Xi stepping on the gas,” said Manges.

Overall, Manges said diversified investment managers had been scaling back their asset allocation slightly in global markets heading into 2023 with an aim to go higher once they see developed economies like the U.S., Germany and Great Britain on better footing.

Here at home, Brennan expects higher borrowing costs to continue and unemployment to pick up, so she advises people to keep their emergency funds flush. She also sees great opportunity for retirees and older workers. “Retirees have had to tolerate more of their money in stocks, because bonds were paying minimal interest. Now we have more options.” She also notes that empty nesters who are behind on their retirement planning can now put $22,500 into their 401(k) plus another $7,500 each year. “A couple of empty nesters who might feel a bit behind can put $60,000 into a 401(k) to catch up, and they should,” said Brennan.

The Chester County Economic Development Council continues its 2023 programming with the 11th Annual SEI Energy Briefing on February 28, presented by CCEDC’s Smart Energy Initiative of Southeastern Pennsylvania and focusing on the impact of the Inflation Reduction Act (IRA) on solar, electric vehicles (EV), geothermal and CHP. More information is at You can also view CCEDC’s interactive Annual Report at