3Q 2023 Investor Presentation
MIS: Macroeconomic Assumptions
Underpinning our Full Year 2023 Outlook
Macroeconomic Assumptions¹
Real GDP2 U.S.: 1.5% -2.5%; Euro area: 0.0% 1.0%; Global: Slow to
about 2.5% by year-end
Global benchmark rates to remain elevated, with U.S. Fed funds rate
above 5%, followed by the potential for rate reductions in 2Q 2024; U.S.
high yield spreads to fluctuate around 400-450 bps, with periodic volatility
Global high yield default rate to rise to 4.5% - 5.0% by year-end
FX rates of $1.22 and $1.06 for GBP/USD and EUR/USD, respectively,
for the remainder of the year
Global inflation levels to continue to decline (U.S.: below 3% by year-end;
large Euro area economies: 3% - 4% by year-end; U.S. unemployment
rate to rise toward 3.8% by year-end)
Tailwinds
Rates nearing their peaks for most major central banks as inflation eases
~$4.4T of refinancing needs between 2024 and 2027
Dry powder at private equity firms
Headwinds
✗ Rising funding costs create refinancing risks for vulnerable issuers
✗ Recessionary concerns
✗ Geopolitical uncertainty, including the prolonged Russia-Ukraine military
conflict, and more recently the military conflict in Israel and the
surrounding areas
Sources: Default rate and unemployment assumptions sourced from Moody's Investors Service "August 2023 Default Report", published September 15, 2023. High yield spreads, GDP and inflation assumptions as of October 25, 2023, from
Moody's Investors Service.
Guidance as of October 25, 2023. Refer to Table 11 - "2023 Outlook" in the press release titled "Moody's Corporation Reports Results for Third Quarter 2023" from October 25, 2023, for a complete list of guidance, as well as assumptions
used by the Company with respect to its guidance.
GDP represents rate of change in real GDP.
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3Q 2023 Investor Presentation
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