‘Twas a week before Christmas, no Grinch was in sight, The Dow Jones soared swiftly, setting records in the night.
A soft landing – once thought to only be achieved by Mr. Clause himself as he arrives on rooftops around the world – has potentially been attained by The Fed after a two-year tightening cycle.
On Wednesday, the Federal Reserve announced optimism about a soft landing, known as the long-awaited “Fed-Pivot” – projecting short-term rate cuts and a gradual return of inflation to its 2.0% goal without a recession. Despite maintaining current interest rates and tightening pace, the Fed revised its short-term interest rate projections significantly downward.
While the market was anticipating a 150 bps (1.5%) rate decrease next year – policymakers indicated no increase in the short-term interest rate, with a median projection of 75 basis points in rate cuts in 2024. This is expected to be followed by another 100 bps in 2025 and 75 bps in 2026.
The deceleration in inflation and a more restrained monetary approach resulted in a surge in the market, with the Dow Jones hitting a record high on December 13th, closing at 37,090. Stocks danced even higher on Thursday with the Dow setting a second-straight record high, closing at 37,248. No doubt, investors rejoiced at the sound of yesterday’s closing jingle bells.
Dow Jones Industrial Average: Unwrapping A Decade of Performance
As we wrap up the year and look ahead to 2024, our dedicated advisors remain committed to helping you achieve your financial goals. From all of us here, we would like to take this time to wish you and your family a joyful holiday season filled with peace, happiness and prosperity!
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