Economy to Slow in 2024 Before Rebounding Growth and Falling Rates Fuel 2025 Comeback
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Economic growth will slow in 2024 before rebounding in 2025. Expect GDP growth to slow each quarter through Q3 2024.
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Inflation has fallen back and should hit the Fed's 2% target by Q2 2024. Core PCE inflation forecast at 2% by mid-2024.
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Expect the Fed to start cutting interest rates in 2024, being aggressive with rate cuts through 2025. Could see up to 250 bps in cuts by end of 2025.
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Stock market valuation currently at fair value overall, but still opportunities in undervalued sectors like commodities, gold miners, communication services.
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Corporate bonds look fairly valued currently with limited upside from spread tightening. Remain neutral on investment grade and high yield.