The picture is looking more promising for investment as the economy enters the second quarter of 2024, asserts a major multinational investment company based in New York.
BlackRock, Incorporated in its new 2024 Global Outlook is seeing a “more supportive near-term backdrop for risk-taking,” additionally predicting that “upbeat market sentiment can persist as inflation keeps falling.”
The report notes that inflation growth has dropped from a high of nearly 15% in late 2021 to the low single digits as of early this year. Fed rates, meanwhile, have gone from just under 5% to around 4% currently.
Equally important, that Fed rate is expected to fall to less than 3% by early next year.
“Inflation across developed market economies has been falling from pandemic highs and looks set to reach 2% this year,” the BlackRock report continues, adding that the trendline will “help pave the way for many central banks to start cutting policy rates.”
Even more, notes the report, “The Federal Reserve’s updated forecasts released in March 2024 still signal three quarter-point rate cuts this year.”
While the nation’s economy is expected to grow now that it has moved away from the travails of the pandemic disruption, “our core view has been that in a world shaped by supply, economic activity would be on a lower growth trend.”
For all of that, warns the report: “We see inflation as a rollercoaster back up in 2025 as the drag from goods deflation fades and elevated wage growth in a tight labor market keeps service inflation higher than pre-pandemic.”
The inevitable and increasing role played by Artificial Intelligence in all of this is also not without note, says the report, adding that “we think upbeat risk appetite can broaden out beyond tech as more sectors adopt AI.”
Founded in 1988, BlackRock is today the largest asset manager in the world, handling more than $10 trillion in assets under management as of the end of last year.
By Garry Boulard