money managers at asset manager natixis said thursday they expect a 50 basis point rise in the federal reserve’s benchmark interest rate in december and a mild recession in the coming year amid continued market volatility in equity and debt markets garrett melson portfolio strategist at natixis investment managers solutions said more dovish signals from the fed’s 75 basis point interest rate hike on wednesday were followed by hawkish language from fed chairman jerome powell during the press conference that followed us stocks continued their slide on thursday a day after volatile trading that ended significantly lower on wednesday after the fed’s move also read powell caught markets ‘off guard’ as traders ponder how high rates will go also read junk bonds may be a good play for returns that are competitive with stocks but less volatile one major takeaway of the fed’s move is the “idea of slower but higher” interest rate hikes which may take longer than expected to carry out melson said a soft landing in the economy with no severe recession as soon as 2023 remains a possibility amid signals of deceleration in the rate of inflation he said in terms of the fed’s december meeting “the base case” is an interest rate hike of 50 basis points although other data points may weigh into the fed’s move as the decision nears he said elaine stokes executive vice president portfolio manager and cohead of the full discretion team at loomis sayles a unit of natixis said volatility in the markets stems from impatience from investors “the market is looking for a shortterm fix for a longterm problem” said stokes who encouraged investors to take a longer term view structural economic challenges such as a tight labor market a shortage of housing and underinvestment in energy infrastructure have all contributed to inflation and they will take time to fix she said adam abbas portfolio manager and cohead of fixed income for harris associates a unit of natixis said he expects a more benign “inflationary recession” ahead with nominal growth of 2 or more in the economy as opposed to more a potential “deflationary bust” down the road the us consumer remains relatively strong and abbas does not see any major systemic risks in the financial system compared to the global financial crisis in 2008 or other more significant downturns he said meanwhile the fed may be penciling in another rate increase of 50 basis points at its december meeting but any sign that inflation isn’t moving within the central bank’s target could send stocks further into negative territory and treasury yields surging market strategists said also read new jobs created in october likely to dip to twoyear low but not enough to tame inflation