Kolanovic Sees ‘Worry Or Perhaps Even Panic’ In 2024
"We think that the decline in inflation and economic activity that we forecast for 2024 will at some point make investors worry or perhaps even panic," JPMorgan's Marko Kolanovic said Thursday, editorializing around the bank's year-ahead outlook for asset prices and the economy.
At the heart of the 2024 debate is one question (or two questions in one): Will decelerating growth and a softer US labor market be greeted warmly by market participants given the read-through for inflation (cooler) and
I expect we’ll end up with bigger rate cuts than the market has priced in at the moment which is half the reason (genAI’s impact on profit margins being the other half) I expect equities to rally in 2024 despite my own low expectations for the broader economy. That being said, I do agree that bonds provide better risk-reward than equities given current valuations.
Trump is basically going to campaign on a day 1 fix: fix the border and start drilling for oil.
Therefore, in anticipation of this, I expect Biden to do everything he can to bring down inflation/price of oil to stimulate the economy in 2024.
Either way, our economy will get some assistance.
He actually uses the term “seal” the border rather than “fix”. But either way, sealing off the flow of immigrants would be inflationary, along with any import tariffs he chooses to crank up.
Under Biden, the U.S. is producing more oli than it ever has. In Northeast Ohio earlier this week, I paid $2.99 for a gallon of unleaded. Want the price lower than that? Get Congress to restrict exports.
My co-Princeton classmate John B. Taylor – I am John ‘FX’ Taylor – created the Taylor rule and it is the best SOFR, STIRS algorithm out there. It says rates down to early 2025 and down BELOW ZERO, TOO. This is not a joke and has nothing to do with Goldilocks or soft landing. My small reputation is a function of cycles – Kitchin, Juglar, etc. and they fit the Taylor rule like a glove at this point. There is a deep recession ahead. Marko is right, and I know the instituional pressures to be positive – so cube his thoughts. His numbers, John B’s and mine don’t lie.