Markets expect rate cuts soon. Central banks say not so fast.
Officials will probably loosen monetary policy in 2024, but they have reasons to move more slowly than investors are betting
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Officials will probably loosen monetary policy in 2024, but they have reasons to move more slowly than investors are betting
The market rally has run out of steam, prompting concerns about whether stocks ran too far too fast
The US market is adjusting to the disparity between market expectations and the Fed's actions, with fewer rate cuts expected. Bank earnings and a pessimistic outlook are contributing to the slowing down of the market. However, the BOFA fund manager survey suggests that long-term bond yields in the US will decrease, leading to increased funds flowing into emerging markets like India. India's strong growth, stability, and execution make it a magnet for investors, especially as funds flow out of China due to its slowing economy and geopolitical tensions.
Last week, Indian markets witnessed modest gains with Sensex and Nifty hitting new record closing highs in the last trading session led by a sharp rally in IT stocks.
Srikanth Subramanian says: "In 2024, if the much-anticipated rate cuts do happen, one factor of uncertainty would be behind us. So, a majority of the money getting freed up from treasuries or fixed income per se will tend to move to equities. And with Gold having a yearly outlook is quite challenging, largely because gold is a hedging bet."