1 Shocking Forecast That Could Make 2024 a Banner Year for Stock Market Investors
For the last two years, market sentiment has largely been dictated by interest rates. Stocks crashed in 2022 as the Federal Reserve began a campaign to raise interest rates faster than it has in more than a generation to bring inflation under control.
Since its first hike in Mar. 2022, the central bank has lifted the federal funds rate from near zero to 5.25% to 5.50%, and rate hikes have continued in 2023 even as the benchmark rate seems to be plateauing at its current level. Still, Federal Reserve Chair Jerome Powell has refused to rule out future hikes, insisting that the Fed's most important objective is to bring inflation down to its target of 2%.
While stocks have risen in 2023 as a feared recession never arrived and new artificial intelligence developments stoked interest in what could be the next major technology platform, interest rate movements have continued to hang over the stock market, often leading to big swings in the S 500 when the Fed announces a rate hike decision or on other news related to interest rates. For example, earlier in November, stocks soared after the October Consumer Price Index report showed inflation was lower than expected, making it less likely the Fed will raise interest rates again, even though it forecast one more hike back in September.
Source Fool.com
