Ken Fisherthe billionaire founder and co-CIO of Fisher Investments, believes that the stock market can continue to grow in 2024 without the need for Federal Reserve interest rate cuts.
What happened: Fisher, in a recent video to his firm’s clients, pointed out that the market’s strong performance in 2023, with the S&P 500 up more than 20% after bottoming in October 2022, occurred without any interest rate cut, Business Insider reported.
“There is no need for rate cuts. The second half of 2022 and 2023 proved this.[Rates] they don’t have the effect on the overall economy and, by extension, the stock market that many people think,” Fisher said.
He suggested that investors may have already factored in the potential impact of future Fed rate cuts, as these policy moves are widely discussed. According to CME’s FedWatch tool, markets are currently betting on a 60% chance that the Fed will cut interest rates by at least 100 basis points by the end of 2024.
See also: Stock Market Hits Record Highs as Powell Hints at Rate Cuts, Bitcoin, Gold Soar: This Week in the Markets
Fisher also noted that despite higher interest rates, GDP has actually accelerated over the past two quarters, indicating that interest rates are just one mechanism in a much larger system.
“It seems like no one is hiding. So, expect a good to great 2024,” Fisher said.
Despite the market’s anticipation of rate cuts, Fisher is among Wall Street’s most bullish forecasters. He previously said the S&P 500 could post modest double-digit gains in 2024.
Because matter: The stock market has seen a record-breaking rally in 2024, with some analysts suggesting the bull market could continue into 2027. This optimism despite concerns about inflation and the potential impact of the Fed’s interest rate decisions.
At the beginning of the year, Jerome Powell, the chairman of the Federal Reserve, hinted at the possibility of monetary policy easing in 2024, citing the uncertain economic outlook. However, Fisher’s comments suggest that the market may not be as reliant on rate cuts as previously assumed.
Despite this, analysts have suggested that the current bull market may only be at half its potential, indicating that the market may have more room to grow, with or without rate cuts.
Read next: The mother of all reports provides ammunition to both bulls and bears
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