Presentation Expert Target: Economic Outlook in 2024

As we enter the new year, investors are keenly eyeing the economic landscape, seeking insight into what lies ahead for the markets and their portfolios. While valuations outside of the largest stocks appear attractive, bond markets have faced significant headwinds due to elevated interest rate volatility and supply imbalances.

Geopolitical uncertainty remains a persistent concern, particularly in light of the Fed's ongoing tightening measures. Despite this, equity markets saw impressive gains in 2023, with relatively low volatility – a testament to the resilience of the economy. However, it is crucial to note that the Fed has firmly pushed back against the notion of early rate cuts, increasing the risk that interest rates will remain higher for longer.

The Fed's December meeting reinforced this sentiment, with no change in rates and forward guidance indicating that rates have peaked. This marks an end to the series of rate hikes, which collectively totalled a cumulative 5.25% over the past two years. While the economy has slowed, it is still vulnerable to any shocks that may arise.

Looking ahead to 2024, economic growth is expected to slow, but a soft landing remains possible. Growth accelerated to 5.2% in the third quarter, and inflation has been steadily trending down towards the Fed's 2% target. Despite initial concerns about a challenging year for the economy and markets, 2023 proved to be a year of surprising resilience.

As we move into the new year, it is essential to stay informed about market trends and economic developments. At Morgan Asset Management, our team produces the Guide to the Markets, providing insights and analysis on the current state of the economy and investment landscape. As you navigate the complexities of 2024, we encourage you to join us in staying up-to-date with the latest information and expert opinions.

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