Market Implications for 2024

Commentary The year 2023 caught experts by surprise. Economists and market analysts alike started the year on a pessimistic note, anticipating recession, market declines, and overall weakness in the face of inflation and high interest rates. Yet the much anticipated recession never arrived, inflation eased from 2022’s highs, and unemployment remained low. Most notably, the financial markets had one of their best-performing years, with leading equity indexes retracing lost ground and testing all-time highs set in 2021. After two years of negative returns, the bond markets rebounded in late 2023 on expectations that central banks around the world would reduce interest rates in the face of lower inflation. U.S. bonds rose just over 5 percent in 2023, but still remain 9 percent below 2020 highs. European bonds rose 6.5 percent on average, with some countries across the continent posting double-digit returns....