Ken Fisher, the billionaire founder and co-CIO of Fisher Investments, believes that the stock market can continue to rise in 2024 without the need for Federal Reserve interest rate cuts.
What Happened: Fisher, in a recent video to his firm’s clients, pointed out that the market’s strong performance in 2023, with the S&P 500 rising over 20% after hitting a low in October 2022, occurred without any interest rate cuts, reported Business Insider.
“You don’t need rate cuts. The back half of 2022 and 2023 showed that.[Rates] don’t have the effect on the overall economy, and by extension then, the stock market that many people think,” Fisher said.
He suggested that investors may have already factored in the potential impact of future Fed rate cuts, as these policy moves are widely discussed. The markets are currently betting on a 60% chance of the Fed cutting interest rates by at least 100 basis points by the end of 2024, according to the CME FedWatch tool.
Fisher also noted that despite higher interest rates, the GDP has actually accelerated over the last two quarters, indicating that interest rates are just one mechanism in a much larger system.
“None seemingly lurks. So, expect a good-to-great 2024,” Fisher said.
Despite the market’s anticipation of rate cuts, Fisher is among the most bullish forecasters on Wall Street. He has previously stated that the S&P 500 could see modest double-digit gains in 2024.
Why It Matters: The stock market has been on a record-breaking rally in 2024, with some analysts suggesting that the bull market could continue until 2027. This optimism is despite concerns over inflation and the potential impact of the Fed’s interest rate decisions.
Earlier in the year, Jerome Powell, the Chair of the Federal Reserve, hinted at the possibility of easing monetary policy in 2024, citing the uncertain economic outlook. However, Fisher’s comments suggest that the market may not be as reliant on rate cuts as previously assumed.
Despite this, analysts have suggested that the current bull market may only be halfway through its potential, indicating that the market may have more room to grow, with or without rate cuts.
Read Next: Mother Of All Reports Give Ammunition To Both Bull And Bears
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