4Q and FY 2022 Investor Presentation
Macro Assumptions Underpinning our FY 2023 Outlook
9 GDP2
0% - 1% United States
(1%) -0% Euro area
1% - 2% Global
Benchmark Rates
Macroeconomic Assumptions1
& Credit Spreads
Global benchmark rates to remain elevated,
with U.S. Fed funds rate peaking above 5%,
followed by rate cuts toward year-end; U.S.
high yield spreads to widen toward 600 bps
in 1Q23, then moderate toward 500 bps by
year-end, with periodic volatility
② Inflation & Unemployment
Global inflation levels to decline, but remain
above central bank targets (U.S.: ~5%
average; large Euro area economies: 5% -
9% average, with considerable variation
among countries); U.S. unemployment rate
to rise toward 5% by year-end
TAILWINDS
Monetary policy tightening cycle expected to end by mid-year as
inflation eases in most countries
HEADWINDS
Default Rates
Global high yield
default rate to rise to
~5% by year-end
€ FX Rates
$1.20 and $1.07 for the
full year for GBP/USD
and EUR/USD FX rates,
respectively
✗
Recessionary concerns
~$4T of refinancing needs between 2023 and 2026
✗
Ongoing geopolitical uncertainty, including resolution of the Russia-
Ukraine conflict
Dry powder at private equity firms
✗
Default rates expected to rise modestly above the ~4% historical average
✗
High cash levels on corporate balance sheets
Sources: Default rate and unemployment assumptions sourced from Moody's Investors Service "December 2022 Default Report", published January 17, 2023. High yield spreads, GDP and inflation assumptions as of January 31, 2023, from
Moody's Investors Service.
1.
2.
Guidance as of January 31, 2023. Refer to Table 11 - "2023 Outlook" in the press release titled "Moody's Corporation Reports Results for Fourth Quarter and Full Year 2022; Sets Outlook for 2023" from January 31, 2023, for a complete
list of guidance, reconciliations between adjusted and organic measures and U.S. GAAP, as well as assumptions used by the Company with respect to its guidance.
GDP represents rate of change in real GDP.
MOODY'S | DECODE RISK. UNLOCK OPPORTUNITY.
4Q and FY 2022 Investor Presentation 11View entire presentation