As the Federal Reserve shifts its focus from inflation to economic growth, what impact will this have on markets and asset allocation? In this week’s update we are going to review these questions and what a less restrictive Fed may mean for the economy and inflation, along with some of the potential risks associated with lower policy rates. We will also discuss which areas of the market, we believe, look attractive in this environment and what leadership may look like going into 2024.
- We stay focused on cheap businesses with good cash flows.
- We believe the Fed pivot sets up cyclical acceleration.
- Ironically enough, lower policy rates may drive up long-term rates – Curve steepening
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