RavenPack releases new insights on interest rates and economic outlook

While inflation, geopolitical tensions, and elections are fueling uncertainty, business executives refine their economic viewpoints, and RavenPack's C-level sentiment indicator reflects them.

How do business leaders anticipate the Federal Reserve's monetary policy decisions in 2024?

Since Q4 2023, business executives have consistently anticipated multiple interest rate cuts by the Federal Reserve. Despite adjustments in March 2024, this expectation remains robust, as evidenced by the increase in "interest-rate-down" and "interest-rate-guidance-down" events we track in business transcripts.

This positive sentiment has elevated our C-Level Economic Sentiment Indicator, signaling strong economic activity.

Are CEOs optimistic or cautious about the US economy's near-term future?

There has been a significant increase in optimism among executives regarding US economic growth since Q4 2023, following concerns over a slowdown in 2023. Transcripts indicate a rise in mentions related to US GDP growth, enhancing the C-Level Economic Sentiment Indicator.

This suggests that further risk can be taken on US equities. Strategies leveraging the indicator as a risk-on/risk-off measure to time asset rotations have been outperforming more traditional portfolios based on fixed allocations of equities and long-term bonds since the start of the year.

Exploring Further

If you would like to learn more, check out the two blogs below.