The dot plot continues to show three rate cuts this year, the same as in December. However, only three cuts are now expected in 2025 (versus four previously) and the long-run neutral rate was nudged up by a tenth to 2.6%.
State Street Global Advisors
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The recent uptick in US inflation has led to a shift in the market's near-term rate-cut expectations, with many economists now predicting a slower pace of rate hikes.
Gold's recent price resilience has been supported by strength across global fundamental demand sectors, including central bank buying and strong jewelry demand.
The state of the economy has historically played a vital role in influencing the performance of US equities during election years. Our analysis suggests that investors may want to stay invested, particularly if reasonable growth and inflation are expected, as there is still time to strategically position portfolios.
Sometimes you pay higher fees for lower costs, depending on your rebalancing size and frequency, trading costs can accumulate significantly and have a larger impact on the total cost of ownership.
The housing rebound is expected to support the economy this year, with the sector likely to experience modest growth in residential investment.
The market's current state is reminiscent of the early 2000s, with a focus on cryptocurrency companies and their advertisements during the Super Bowl.
The 2024 US presidential election will likely have a significant impact on markets, with the potential for policy changes and increased political volatility. The current macroeconomic backdrop favors President Joe Biden more than what political polls suggest, with most macroeconomic indicators pointing towards an improving economy.
As we approach the end of a very turbulent 2023, we are cautiously optimistic, with developed market central banks having come to the end of the tightening cycle and signaling relief on rates is not too far off.
The market's resilience in 2023 was a testament to the economy's ability to weather the impacts from higher interest rates better than expected. Despite softening economic data and shrinking inflation, investors are optimistic about the future, but they may be underestimating the risks to the economy.
Gold saw a significant turning point in October, with the spot price rising 7.32% in the US$/oz, the largest monthly gain since March 2023.
Gold as a strategic asset class can provide a unique combination of benefits to investors, including risk management, capital appreciation, and wealth preservation.