The year ahead
Whilst the prospect of a pivot seem a “when”, not “if” decision, how and whether policy makers perfect its timing based on the data remains to be seen.
Interest rates will by no means be the only factor driving markets in 2024: economic growth outlook, and bumpy declines in inflation trends are also key macro factors. There is also no shortage of known geopolitical risks that can flare up (for example Ukraine, Taiwan, the Red Sea and US and UK elections), in addition to all the unknowns too!
But if there is a pivot in policy rates, as the market now expects, then a light tailwind after a heavy headwind will be most welcome for risk assets as cash gets redeployed. It also provides some encouragement for the outlook for investors’ portfolios after a few bruising years of bad news.
Here’s to a pivotal 2024!
Henry Cobbe is head of research at Elston Consulting
