2024 Q2 Economic and Market Commentary

Dear Clients,

As we enter the 2nd quarter of 2024, we continue to be cautiously optimistic about the markets and economy. We are closely tracking a few key factors that we believe will shape how the year plays out:

  • Inflation
  • Interest rates
  • Economic resilience

Inflation continues to remain significantly lower than its 2022 peak1 and came in at 2.8% annually in February. Inflation’s trend downward towards the Federal Reserve’s 2% target has not been a straight line but continued progress bodes well for the Fed to cut rates this year as anticipated. This is positive news for markets which should respond well to interest rate cuts.

The likelihood of the Fed cutting rates this year will be dependent on success in keeping inflation under control. We are on track for rate cuts this year2 but the Fed will remain cautious in fear of cutting rates too fast and too soon which risks increasing inflation.

Lastly, our economy has demonstrated resiliency with a strong labor market3 which has contributed to economic growth but also risks higher inflation. We will continue to monitor the trajectory of the labor market because it could provide some early signals of what the Fed might do with interest rates.

As always, if you have any questions, we would love to hear from you! Please contact your advisor and they will be happy to schedule a meeting, or call our office at 952-852-1293.

Lori Tauring, and
The Team at Blue Heron Wealth Partners