Bullish Outlook for Global Equities as Fed Signals Gradual Rate Cuts in 2025

Dec 2024

Zeus Investments, today reiterated its optimistic outlook for global equities, citing the U.S. Federal Reserve's recent indication of potential gradual interest rate reductions in 2025. This policy shift is expected to bolster investor confidence and stimulate economic growth, positively impacting equity markets worldwide.

The Federal Open Market Committee's (FOMC) minutes from its November 6–7, 2024 meeting revealed a consensus among officials to lower the federal funds rate target range to 4.5%–4.75%, effective November 8, 2024.

This decision reflects the Fed's commitment to supporting economic expansion and achieving its 2% inflation target.

Zeus Investments anticipates that the Fed's accommodative monetary policy will enhance liquidity and reduce borrowing costs, thereby encouraging investment and consumption. This environment is conducive to higher corporate earnings and improved equity valuations.

"The Federal Reserve's move toward a more dovish stance is a significant catalyst for global equity markets," said George Zhu, Chief Executive Officer at Zeus Investments. "Lower interest rates typically lead to higher valuations and increased investor appetite for risk assets, which we believe will drive equity markets higher in the coming year."

In addition to the Fed's actions, Zeus Investments notes that global economic indicators are showing signs of resilience. The International Monetary Fund projects global GDP growth to continue at 3.2% during 2024 and 2025, maintaining the pace observed in 2023.

"With supportive monetary policies and steady economic growth, we are confident in a positive trajectory for global equities," Mr. Zhu added. "Investors should consider maintaining diversified portfolios to capitalize on the opportunities presented by this favorable environment."