Wealth Outlook 2024 - Slow then grow

19 Wealth Outlook 2024 | Our outlook FIGURE 9 YoY change in Fed policy rate and growth of non-farm US employment % Recession Fed Funds Target Rate US Unemployment Rate 15 10 5 0 1985 1990 1995 2000 2005 2010 2015 2020 Slow then grow Source: Haver Analytics through October 31, 2023. An economic collapse is not a prerequisite for Fed easing. As employment growth slows, the Fed will become increasingly concerned about the interaction of its self-described restrictive monetary policy and the labor market. It is notable that since 1980 (when the Fed started taking more responsibility for controlling inflation), the Fed has begun cutting rates with US employment averaging gains of 146,000 per month for the half-year before. This is one of the reasons the Federal Open Market Committee (FOMC) participants forecast two rate cuts as a median estimate in 2024. While we don’t project anything close to a return to zero interest rate policy, we will note that easing cycles tend to be more pronounced than the Fed’s projections made a year or more in advance.