Stocks Soar, Bonds Bounce Back as Inflation Falls and Fed Hints at Rate Cuts
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Stocks and bonds have rallied strongly in 2023 as inflation falls, growth remains resilient, and the Fed signals an end to rate hikes plus future cuts.
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The environment has shifted to be more constructive for stocks and bonds compared to a year ago when recession fears were high.
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Attractive opportunities may exist in stocks with more room to rally, still-high bond yields to lock in, and contained credit stresses to take advantage of.
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Markets are repricing quickly but there still may be room for stocks and bonds to run as the Fed embarks on cutting rates.
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As we close out 2023, this year brought bright spots like declining inflation as well as challenges like financial market stress.