Weekly market commentary - 15 December 2023

This week markets received a boost as the Federal Reserve strongly indicated that rate cuts are on the way in 2024. On average, the members of the rate setting committee see US rates falling from 5.5% to 4.75% during the course of next year. This is a big shift in tone in just three months. Back in September the average projection was for just a single quarter point cut to take the rate back to 5.25%. The boost to markets in the short term was dramatic as rising government bond values pushed government bond yields down significantly and global equities recorded more gains to cap a strong year.

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