Press release
MIDYEAR 2024 INVESTMENT OUTLOOK: EQUITY AND FIXED INCOME MARKETS ADJUSTING TO ACCOMMODATE CENTRAL BANK POLICY EXPECTATIONS
Active Investing Appears Primed to Favor Shifting Market Conditions and Identify Pockets of Opportunity for Investors BALTIMORE, June 20, 2024 /PRNewswire/ --
About this update from T. Rowe Price Group, Inc.
[{"type":"text","content":"Active Investing Appears Primed to Favor Shifting Market Conditions and Identify Pockets of Opportunity for Investors \nBALTIMORE, June 20, 2024 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, released its outlook for global financial markets for the remainder of 2024. Underpinning the outlook for the next six months is the change in expectations for central bank policy. Given pricing on interest rate futures, there will likely be far fewer interest rate cuts from global central banks than seemed likely at the start of the year. Equity and fixed income markets are adjusting accordingly, noting the following key expectations for the balance of the year:\n\nBroadening global growth in light of decreasing recession riskElevated potential for Fed surprisesRisk of reaccelerating inflation, driven in part by sticky services inflationIncreased opportunities in equities, specifically in value and potentially small-capA reduced liquidity preference in favor of equities and short-duration bondsWhile there continues to be a place for both active and passive management in investor's portfolios, this challenging market environment, including higher rates, continued asset price dispersion and more volatile markets, supports conditions for active managers to outperform.\nQUOTES\nNikolaj Schmidt, Chief International Economist\n\"The global economic outlook consensus has markedly changed over the last six months. While in late 2023 falling inflation supported expectations of brisk rate cuts, today we foresee a broadening of global growth, resilient inflation pressures, and limited easing from central banks.\"\n\"In the U.S., the Fed is more likely to surprise with fewer cuts rather than with more. We expect to see the Fed cutting 25 basis points (0.25%) at its December policy meeting, after the November elections are out of the way, and possibly once in the late summer. The outlook for Fed easing in 2025 is less clear, one or two rate reductions seems realistic.\"\nKen Orchard, Head of International Fixed Income\n\"While inflation is notoriously difficult to predict, it's clear that it isn't going anywhere. Last year we saw a decrease in global inflation due to goods disinflation; now services inflation is driving a renewed upward pressure. This is sticky, and needs to fall, but several factors woul...