For followers of financial history, the signs may already seem clear. The US economy has just endured the most aggressive Federal Reserve rate tightening cycle in over four decades. Since World War II, there have been 14 Federal Reserve rate hiking cycles; strikingly, 11 of these cycles precipitated a recession. When these hiking cycles didn't trigger an economic downturn, inflation had not strayed far from the Fed’s target.
Making definitive predictions about the financial future can often feel like a losing game. Yet, years of historical data and the analysis of pertinent indicators can provide us with a dependable foundation on which to base our decisions.
Gazing into the economic crystal ball for 2024, I see yet another tough year ahead for the 60/40 portfolio, with bonds likely to outshine stocks in the year to come. But why? Let's scrutinize the available facts that have shaped my bearish perspective.
