๐ ๐ 3 Rate Cuts Expected in 2024 as Investors Remain Bullish
Happy Wednesday all,
A pretty big week in finance with another Fed Meeting and the Reddit IPO! We got some really good news out of the Fed earlier today with 3 expected rate cuts to round off the year. The meeting was pretty standard for the most part, with Jerome Powell putting us in an optimistic hold pattern for the rest of year. He ruled out raising rates for 2024, so now weโre just waiting for more positive-trending economic data in order for the Fed to cut rates. His comments were mostly dovish. The market was happy about the comments as the S&P 500 closed about +0.90% today.
Iโll be going to the Warriors game tonight against the Memphis Grizzlies! SoFi kindly invited me, so I get to go for freeโฆ and I think this may be the closest Iโll ever get to the court since their suite is closer to the floor. Iโll share some pics on Instagram a bit later, but Iโm mostly excited to see Steph Curry, watch some good basketball, and get some food!
Enjoy this weekโs Hump Days!
- Humphrey, Rickie & Tim
๐ Eye-Catching Headlines
๐ Bidenโs EPA Gives Automakers More Leeway to Phase Out Gas-Engine Cars (WSJ)
๐ต The Era of No-Brainer 5% Returns on Cash Is Ending (WSJ)
๐ U.S. No Longer Ranks Among Worldโs 20 Happiest Countries (WSJ)
๐ Hiring Booms at SpaceX and Blue Origin Making It Hard for NASA to Attract Talent (Bloomberg)
๐ค OpenAI Sprinting to Keep Up With Startups on AI-Generated Video (Bloomberg)
The Weekly Brief
Fed Maintains Outlook for 3 Rate Cuts in 2024, Less Cuts in 2025
In the Fed meeting today, the Fed decided to keep interest rates steady within the 5.25%-5.5% range, maintaining the highest level since 2001. Despite this, Fed officials outlined a plan for three quarter-point rate cuts by the end of 2024.
The central bank's "dot plot" projections indicate a slower pace of rate reductions in the coming years, with a long-term goal of reaching a "neutral rate" of around 2.6%.
Global Fund Managers Turn Bullish As Recession Talks Fade Away
Bank of America's March Global Fund Manager Survey revealed a surge in optimism among fund managers, with global growth expectations at a two-year high and diminished recession risks leading to the highest "risk appetite" since November 2021.
The survey found a consensus for a "soft" economic landing with only a minority expecting a "hard" landing. Despite a widespread expectation for declining short-term interest rates, inflation remains the primary concern, with opinions split on whether artificial intelligence is in a bubble.
Saudi Wealth Firm, Andreessen Eye Up to $40 Billion for AI Fund
Saudi Arabia's Public Investment Fund (PIF) is reportedly in preliminary discussions with venture capital firm Andreessen Horowitz to create a fund, potentially worth up to $40 billion, focusing on AI investments.
The region's increasing investment in AI is partially in an attempt to reduce dependency on oil revenues. The proposed fund also hopes to mitigate scrutiny by partnering with a recognized U.S. firm amidst political concerns over Gulf states' tech investments and their geopolitical implications.
Reddit Listing IPO on the NYSE Today!
Reddit is preparing for its IPO today, aiming to price its shares at the upper end of the marketed range, potentially raising up to $748 million by offering 22 million shares at $31 to $34 each.
The IPO, led by Morgan Stanley and Goldman Sachs, is set expected to begin trading on the New York Stock Exchange under the symbol RDDT.
The company, which reported a net loss of $91 million on $804 million in revenue in 2023, is allocating a portion of its IPO shares to its early users and moderators, highlighting its community-centric approach.