The economic and market pressures hitting consumers are likely to show even greater impact in 2023, according to JPMorgan. Strategist Dubravko Lakos-Bujas said in a note to clients on Thursday that belt-tightening by consumers and companies will weaken corporate earnings next year and send the broader economy into a recession. "Consumers have mostly exhausted post-Covid excess savings and for the first time are getting hit by a broadening negative wealth effect from all assets simultaneously (e.g., housing, bonds, equities, alternative/private investments, crypto). The proverbial snowball should continue to gain momentum next year as consumers and corporates more meaningfully cut discretionary spending and capital investments," Lakos-Bujas said. Many Americans have suffered a reduction in wealth this year. The S & P 500 is down about 14% in 2022, even with a recent rally. The value of cryptocurrencies and other speculative asset classes have plunged, with bitcoin down more than 60% year to date. Meanwhile, the Federal Reserve's interest rate hikes have helped create a brutal year for bond investors , and housing prices have also started to fall. Lakos-Bujas wrote that he expects S & P 500 to test its recent lows in the first half of 2023 before rebounding, if the Fed starts to change its course. "This sell-off combined with disinflation, rising unemployment, and declining corporate sentiment should be enough for the Fed to start signaling a pivot, subsequently driving an asset recovery, and pushing S & P 500 to 4,200 by year-end 2023," Lakos-Bujas said. On Wednesday, Fed Chair Jerome Powell said smaller rate increases may start in December but added that "we have a long way to go in restoring price stability." Traders expect a half-point hike from the Fed on Dec. 14, according to the CME FedWatch Tool. — CNBC's Michael Bloom and Jeff Cox contributed to this report.