Resilient US Economy and Market Recovery Driven by Future Rate Cut Expectations, Technology Sector, and Low Inflation

According to the CME FedWatch tool, markets are currently seeing a ~74% probability that a hike will not take place at the Fed monetary policy committee meeting in June. In addition, expectations of future rate cuts closer to the end of 2023 and continued rate cuts through 2024 are increasing, further boosting investor sentiment, supporting valuations of technology companies, growth sectors in general and contributing to the upward trajectory of the market.

Lower inflation has also played a role in the positive market performance. Inflationary pressures continue to fall, allowing consumers to maintain their purchasing power and businesses to plan for the future with greater certainty, removing uncertainty about inflation. This favourable inflation environment has strengthened investor confidence in the resilience of the economy in the 2nd half of the year, given the expected policy shift from the Fed.

Moreover, the US economy has demonstrated its resilience, continuing to show growth despite relatively high interest rate levels. Key economic indicators such as GDP growth, employment figures, labour market strength and consumer spending are showing signs of stability, indicating sustained and balanced economic growth. Expectations of a soft economic landing have allayed fears of a prolonged recession and laid a solid foundation for market recovery.

Maxim Manturov

Maxim Manturov began his career as investment analyst in 2017, conducting a credit analysis of global market companies and stock fluctuations assessment. He also participated in development of fixed income portfolio strategy which included more than 100 security names.

In 2020, Freedom Finance Analytical Center was awarded as Best Research Center by Global Banking & Finance Review. In the same year, Bloomberg ranked Freedom Finance's Beyond Meat and Zoom Video stock recommendations as "the best" for forecast accuracy.

Now Maxim continues to develop the Freedom24.com investment Ideas section as Head of Investment Advice. Out of duty, he is fond of cross fit and freeride snowboarding.