Fidelity on sticky inflation, and only limited Fed cuts – "market is like a spoiled child"

<p>Fidelity Investments commented on their outlook for the Federal Open Market Committee (FOMC) and equity markets in 2024.</p><p>On the Fed:</p><ul><li>“A few rate cuts make sense because inflation has fallen. I think it’s likely to be sticky at around 3%” </li><li>“The market is like a spoiled child. It gets a few and it wants more, and that’s a very typical situation that we’re finding ourselves in right now."</li></ul><p>On the equity market, he's bullish, but wary:</p><ul><li>interest rate cuts will keep the economy in a ‘goldilocks’ scenario</li><li>If the 10-year Treasury note yield remains between the 4% and 5% level, the stock market “will be okay,”</li><li>Equity valuations are priced in,a don't thus corporate earnings will be needed next year</li><li>“The open question I think is one where if we see a rotation from The Magnificent Seven to everything that’s been left behind, and I do think that that is very likely, what kind of absolute trend does that produce?,”</li><li>“When 30% of the market gets rotated into all the cats and dogs that are on the 70% side, how strong can the index actually be?”</li></ul><p>Fidelity is one of the largest asset managers in the world with around US$4.3 trillion in assets under management. Comments come from Jurrien Timmer, director of global macro, appearing on CNBC on Thursday.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.