Press release
T. ROWE PRICE EXPERTS SHARE 2024 OUTLOOK FOR GLOBAL FINANCIAL MARKETS
New regime of "higher for longer" inflation, elevated interest rates, and slower economic growth are setting the context for stock and bond markets BALTIMORE,
About this update from T. Rowe Price Group, Inc.
[{"type":"text","content":"New regime of \"higher for longer\" inflation, elevated interest rates, and slower economic growth are setting the context for stock and bond markets\nBALTIMORE, Nov. 14, 2023 /PRNewswire/ -- T. Rowe Price held its 41st annual global market outlook press briefing today in New York City, with a panel of the firm's experts sharing their expectations for global financial markets in 2024.\n\nChief U.S. Economist Blerina Uruçi spoke about the Fed's challenges managing a broad range of risks, the impact of inflation and rising rates, the cooling of the U.S. labor market, and the outlook for high deficits and debt levels going into 2024. Steve Boothe, portfolio manager and head of global investment-grade debt, said that fixed income markets currently exist in a fragile equilibrium but that the historic sell-off in bonds in 2022 has created opportunities for all types of investors. Peter Bates, portfolio manager of the Global Select Equity Strategy, believes that the market environment in the next 10 years could be fundamentally different than the pre-pandemic period, transitioning from a higher-growth regime supported by low inflation and low interest rates to a new, lower-growth regime characterized by higher inflation and higher rates. Capital markets strategist Tim Murray opined that we may well avoid a recession but that there will be no real recovery until the Fed pivots; in the meantime, investors' portfolios need to account for both inflation and recession risk. Dom Rizzo, portfolio manager of the Global Technology Equity Strategy, discussed the investment opportunities in artificial intelligence (AI), which he thinks may be the biggest technological innovation since the advent of electricity.\nQuotes and Key Observations\nGlobal Economy\nBlerina Uruçi, Chief U.S. Economist, Fixed Income Division\n\"The major takeaway from recent economic data is a resilient U.S. economy supported by a resilient consumer. Inflation has decelerated, and the labor market is gradually cooling through slower employment growth and a decline in the job vacancy rate, but it is not rolling over.\" Based on Fed Chair Jerome Powell's and other hawkish Federal Open Market Committee (FOMC) members' responses to the rise in yields, the Fed has likely reached a peak in interest rates, and the next decision will be for how long to keep interest rates at the cu...