1 Super Stock Down 72% to Buy if the Fed Cuts Interest Rates in 2024
Inflation in the U.S. -- as measured by the Consumer Price Index (CPI) -- hit a 40-year high of 8% in 2022 (annualized). As a result, the U.S. Federal Reserve embarked on a campaign to aggressively hike interest rates, taking the federal funds rate from a historic low of 0%-0.25% in March 2022 all the way up to 5.5% by August 2023.
That rapid increase has crushed the housing market. In January of this year, U.S. existing home sales came in at 4 million annualized units, which was only a slight uptick from the 13-year low of 3.85 million just a few months prior. Companies like Zillow Group (NASDAQ: Z)(NASDAQ: ZG), which rely on people buying and selling homes to generate revenue, have struggled throughout this period.
The interest rate hikes have worked, as the CPI fell to an annualized 4.1% rate in 2023. That's still above the Fed's target of 2%, but the central bank estimates it will cut interest rates three times in 2024, which could reignite the housing market.
Source Fool.com
