After nearly three years of unprecedented economic and geopolitical shocks, experts are effectively throwing up their hands and admitting they don't know what's coming next, Emily writes.

The latest: The probability of a recession in 2023 is between 45% and 55%, per the authors of a report from Goldman Sachs' Investment Strategy Group released this morning.

• That's right down the middle — they'll basically be right either way.
• Still, it's the highest number since the group began making its prediction more than a decade ago; and higher than the 35% forecast from Goldman's chief economist, Jan Hatzius, which is the official view of the firm.
• "This year our outlook is called 'caution, heavy fog,'" said Sharmin Mossavar-Rahmani of Goldman at a briefing about the 110-page report. "We're trying to give a sense of uncertainty...and we should be cautious about how we proceed."

Zoom out: Recession talk in the media and among market experts was intense last year, peaking in the summer along with the Consumer Price Index (see the chart below).

• And certainly, it was a rocky year with skyrocketing inflation, war, and a big drop in stock and bond prices. But the arbiters of recession have not declared that the U.S. was ever in one last year (at least not yet).
• The number of news stories about recession in 2022 exceeded the number tracked in 2020 when the U.S. economy was actually in a recession, the Goldman report found.

Between the lines: Under the hood, the authors were actually fairly optimistic about what all this uncertainty means for the stock and bond markets — noting that 2023 is "likely to be less tumultuous."

• Positive signs include cooling inflation, which would mean less extreme interest rate hikes. The authors also see falling wage growth as a good sign (which may be true for the markets but less so for many workers).
• Two consecutive down years in the S&P is "very rare historically," said Brett Nelson of Goldman who co-authored the report.

If a recession does happen, the group thinks it will be mild and that the S&P could still post gains.

• Yes, but: Forces outside of business are making folks nervous.
• "As we talk about geopolitics, it is an irrational environment given what China and Russia are doing from our perspective," Mossavar-Rahmani said.
• The report highlights China's aggressive posturing around Taiwan and the lack of a face-saving off-ramp for Russia in Ukraine.
• "There could be things we just cannot anticipate," she said.
• Chamber of Commerce CEO Suzanne Clark struck a similar point in a speech Thursday: The greatest risks to business are coming from outside the businesses themselves. But she focused on U.S. politics. "The only risk that businesses say is rising — is getting worse — is the risk that comes from our own government."

💭 Our thought bubble: After three eventful years, it would actually be weird for anyone to express much certainty about broad macro trends.

🤑 Traders drive better-than-expected profits at JPMorgan. (Yahoo)

📱 Apple's Tim Cook takes rare CEO pay cut after pushback. (Bloomberg)

🚘 Tesla cuts prices on new models in U.S. (Axios)

Used vehicle prices — once at the bleeding edge of the post-COVID inflationary upswing — are falling fast. And the pace of the downturn is building, according to a leading indicator, Matt writes.

Why it matters: While auto price movements are typically a small factor in overall inflation, outsized moves can exert a big influence on inflation data.

Driving the news: One component of yesterday's broadly cool CPI release was a nearly 9% drop in prices of used cars and trucks over the prior year.

Flashback: Used vehicles were in the vanguard of the post-pandemic price surge, which centered on goods that were in high demand but low supply due to COVID-related halts to production.

• In June 2021, used auto prices were up a remarkable 45% from the previous year.

What we're watching: The Manheim Used Vehicle Value Index tracks wholesale prices of used cars sold at auction. It tends to predict prices shoppers see on auto lots a couple of months later.

• The latest numbers from the firm (part of Cox Enterprises, which also owns Axios) showed a 13% drop in auction prices in December from the prior year — suggesting the consumer price slump will snowball in the coming months.

Rents are starting to roll over in parts of the country that were near the epicenter of the COVID-era home-price boom, Matt writes.

Why it matters: Costs of shelter are currently key drivers of inflation.

• In December 2022, rents were 8% higher nationally than they were the same month in 2021, according to yesterday's CPI figures.

Yes, but: Because of the way rents are measured in the government's CPI report, it can take as long as a year for the latest dynamics in the rental market to show up in official inflation readings.

The bottom line: Nevertheless, those shifts are becoming increasingly clear, especially in red-hot Sunbelt real estate markets such as Florida, Arizona and Texas.

• Data from Realtor.com shows rents there are already falling. And that means downward pressure on the key inflation driver of the moment — housing — is already in the pipeline.

The world of markets and economics continues to be rocked by the recent rise of egg prices.

• Well, maybe not rocked — but even in inflation-adjusted terms, the average price of a dozen eggs hit a record in December, according to the CPI numbers out yesterday, Matt writes.

Flashback: The closest they've ever come to this level was back in 1984. Prices soared to a then-record as farmers moved to pass along rising feed costs driven by drought. A bird flu epidemic also broke out in the Northeast, particularly in Pennsylvania.

• Prices also spiked in 2015 due to, you guessed it, bird flu.

Yes, but: At least the recent surge in egg prices, driven — in part — by the mass culling of hens due to avian flu is a visible outlier (outlayer?) to inflation's broader overall trend, which appears to be slowing nicely.