Powell Ignites 2024 Stock, Bond Gains With Promises of Cuts

US stock and bond prices will see modest gains as the Federal Reserve pivots to cutting interest rates next year, though the easing may not be as aggressive as markets are now expecting.

Those are the key results of Bloomberg’s latest Instant Markets Live Pulse survey with 190 respondents, conducted after the Fed’s latest meeting Wednesday, when it set off broad rallies by signaling it’s likely to start cutting rates as inflation cools.

Investors expect the S&P 500 Index to rise to about 4,835 at the end of 2024, an increase compared to the last survey before the Fed decision. Still, such a gain, which amounts to about 3% from current level, reflects skepticism about how much US stocks can rally after this year’s advance of almost 23%.

Powell Boosts Prospects for S&P 500 Gains in 2024

Similarly modest gains are seen for the bond market: The median call in the survey was for the 10-year Treasury yield to slide to about 3.8% from just above 4% currently.