Stocks Soar on Hopes of 2024 Rate Cuts, But Outlook Remains Uncertain
• Stocks are riding high in 2023 on expectations of interest rate cuts in 2024 and excitement about generative AI, but the future is uncertain.
• The Fed forecasts 3 quarter-point interest rate cuts in 2024 which historically helps boost stock valuations when rates fall.
• Previous rate-cut cycles occurred during recessions, but this time economic weakness is not expected.
• Rate cuts are seen as a correction from aggressive hiking to control inflation now that it's eased.
• With stocks already at all-time highs, the Fed may have to cut more than forecast to exceed expectations and fuel further stock gains.