Commentary
2024 Outlook
Five potential surprises for the economy and the markets.
Key Takeaways
- Financial markets start 2024 with a solid fundamental backdrop, including a persistent U.S. economic expansion and monetary policymakers who are inclined toward easing.
- We believe a lot of good news is already priced into the markets, which implies asset valuations may make it more difficult for returns to surprise on the upside in 2024.
- The biggest changes in asset prices are typically driven by surprises. Following are some potential surprises we’re watching for in 2024:
- Inflation may not trend back toward the Fed’s 2% target, due to a combination of factors including structurally tighter labor markets.
- If the disinflation trend of 2023 is indeed disrupted, the Federal Reserve may have a hard time cutting interest rates to the extent investors expect.
- If the Fed cuts rates aggressively, it might be because of the emergence of risks to economic growth that could threaten an economic soft landing and challenge corporate profit margins.
- Productivity growth may have found a long-term bottom, and capital expenditures may provide surprising support for a number of multiyear investment opportunities.
- Large cap, high-quality U.S. companies may once again have superior fundamentals, but they might surprise by finishing lower on the asset-return leaderboard after a phenomenal 2023.
Next steps to consider
Asset Allocation Research Team (AART)
Access economic, fundamental, and quantitative analysis from our Asset Allocation Research Team.
Learn more
International Equity
Discover new ideas for your clients’ portfolios with our full range of international equity funds.
Learn more
Domestic Equity
Target your clients’ investment needs with our broad lineup of domestic equity solutions.
Learn more
1136637.1.0
50787AC938484D36B2994E68CCF88726