Stocks at Risk if Rate Cut Hopes Don't Materialize, May See Pullbacks
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Stocks are vulnerable if economic data suggests fewer Fed rate cuts in 2024. Hotter economic data has already led to pullbacks in rate cut bets and stocks.
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Markets have priced in around 6 rate cuts this year. Bank CEOs and economists see less, around 4 cuts.
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Incoming economic data and Fed speak not supporting the high hopes for rate cuts. This mismatch poses risks.
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Fixed income can benefit if Fed pauses hikes and begins rate cut cycle as expected. Worth adding to portfolios amid uncertainty.
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Risk of market pullbacks if outlook on economy stays strong and rate cut hopes get dialed back further.