4Q and FY 2023 Investor Presentation
MIS: Macroeconomic Assumptions
Underpinning our Full Year 2024 Outlook
Macroeconomic Assumptions¹
Real GDP2 U.S.: 1.0% - 2.0%; Euro area: 0.5% - 1.5%;
Global: 2.0% - 3.0%
Global benchmark rates: Gradual rate reductions starting in 2Q 2024;
U.S. high yield spreads to fluctuate in the 400 - 500 bps range, with
periodic volatility
Global high yield default rate to rise toward 5.0% in the first half and
then ease to around 4.0% by year-end
FX rates of $1.27 and $1.10 for GBP/USD and EUR/USD,
respectively, for the year
Global inflation levels to continue to decline (U.S.: 2.0% by year-end;
large Euro area economies: around 2.0% by year-end); U.S.
unemployment rate to average between 4.0% - 4.5% for the year
Tailwinds
Most central banks expected to cut rates as inflation eases
✓ ~$4.4T of refinancing needs between 2024 and 2027
✓ Dry powder at private equity firms
Headwinds
Х
Elevated funding costs pose potential refinancing risks for vulnerable
issuers
Х
Geopolitical uncertainty, including the prolonged Russia-Ukraine military
conflict, and the military conflict in Israel and surrounding areas
Recessionary concerns
✗
Sources: Default rate and unemployment assumptions sourced from Moody's Investors Service "December 2023 Default Report", published January 16, 2023. High yield spreads, GDP and inflation assumptions as of February 13, 2024, from
Moody's Investors Service.
Guidance as of February 13, 2024. Refer to Table 12 - "2024 Outlook" in the press release titled "Moody's Corporation Reports Results for Fourth Quarter and Full Year 2023; Sets Outlook for 2024" from February 13, 2024, for a complete list of
guidance, as well as assumptions used by the Company with respect to its guidance.
1.
2. GDP represents rate of change in real GDP.
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