Investors increasingly expect a soft landing ahead of the Fed's crucial decision

Published On Sep 17, 2024, 11:02 AM

Investors are increasingly optimistic about a 'soft landing' for the global economy, where inflation decreases without a significant economic downturn. In a recent survey by Bank of America, 79% of fund managers expected this scenario, the highest since May 2023. Current economic data indicates a cooling labor market, but low layoffs and stable consumer spending support this outlook. The Federal Reserve is expected to announce its first interest rate cut since 2020, with markets favoring a 50 basis point reduction. Analysts suggest that if the Fed acts quickly, it could enhance investor confidence and bolster stock prices, despite potential risks from higher bond yields.