Fidelity Investments commented on their outlook for the Federal Open Market Committee (FOMC) and equity markets in 2024. On the Fed: “A few rate cuts make sense because inflation has fallen. I think it’s likely to be sticky at around 3%” “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." On the equity market, Fidelity is bullish, but wary: interest rate cuts will keep the economy in a ‘goldilocks’ scenario If the 10-year Treasury note yield remains between the 4% and 5% level, the stock market “will be okay,” “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?,” “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?”
Most people don't care about rates of change. They look at the absolute number. So even if inflation goes from 9% to 3% that 3% is off a base that is 9% higher.