In a significant shift, central banks across the world are projected to dial down interest rates in 2024, following an era of sharp rate increases. The main concern is whether this change can be executed swiftly enough to alleviate the impact of past tightening and avoid a severe economic downturn.
What Happened: As reported on Bloomberg on Monday, investors are optimistic about this transition, backed by positive consumer price data and comments from influential figures such as European Central Bank board member Isabel Schnabel and Federal Reserve Governor Christopher Waller.
This anticipated change is expected to ease the burden on households and businesses struggling with high-interest costs, particularly in the U.S. and Canada.
Ellen Zentner, Chief U.S. Economist at Morgan Stanley (NYSE:MS) noted, "2024 is a transition year—it's a turning point for the economy, it's a turning point for monetary policy."
The objective is to shift from strong growth to slower growth, rather than from growth to recession.
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