The Fed Chairman Jerome Powell said it was too soon to rule out further rate rises or to start discussing rate cuts in a speech this morning. Basically, it’s the same message from him over and over again. Though, some investors are predicting rate cuts to happen as early as Q1 2024 though. We shall revisit this post a year from now and see what actually happens. My personal opinion is that 2024 will be volatile. The RRP facility will be drained, long term rates will go up further, commercial real estate will be in deeper distress, house prices will correct further, America’s deficit spending will continue and China’s debt spiral will get worse. But we will also see amazing technological advances in AI, gene therapy, energy, climate, etc and it’s possible the situations in Ukraine and Gaza will get better. 2024 is set to be a very eventful year. If there’s a rate cut in Q1 2024, that means something serious breaks so the Fed has to cut to soften the blow. Investors should be careful what they wish for.
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