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Wealth outlook 2024: slow then grow

The US economy is expected to slow modestly in 2024 before accelerating in 2025

  • GDP growth is forecast to slow from around 2.4% in 2023 to 1.6% in 2024, before picking back up to 2.6% in 2025.
  • Inflation is expected to continue decelerating towards the Fed’s 2% target by the end of 2024.
  • The Fed is anticipated to lower rates starting in mid-2024 if unemployment rises as expected.

Core portfolios are poised to outperform

  • Bond and equity valuations have been reset to more attractive levels across asset classes.
  • The two pillars of investment returns – income and growth – have been reinvigorated.
  • Diversified portfolios may benefit from a recovery in both bonds and equities.

Emerging opportunities beyond mega-caps

  • Small- and mid-cap equities, as well as early cyclicals, look attractive amid an economic slowdown.
  • Infrastructure plays like semiconductors, robotics, and medical technology appear well-positioned.
  • Private capital, real estate, and select fixed income strategies offer yield premiums.

Geopolitical and monetary policy risks remain

  • Upcoming US elections and the war in Ukraine add uncertainty.
  • Inflation could relapse or the global economy disappoint more than expected.
  • Investors should maintain diversification and flexibility given crosscurrents.