As a result, investors have lowered their expectations for future interest rate hikes. Equities have recovered: the S&P 500 benchmark of leading stocks is up more than 5% in the past three months, boosting the paper wealth of many Davos executives and financiers. Companies typically cut back on investment in a downturn, but big groups have reasons to keep spending. Higher interest rates will prove more painful as households deplete savings built up during the pandemic. The Davos conflab has a well-deserved reputation for delivering a consensus which turns out to be wrong in the 12 months that follow.

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