The Tell: Investors won’t see relief until 2024 in the form of Fed rate cuts, warns Credit Suisse

by | Dec 9, 2022 | Stock Market

Global central banks already managed to “pop some of the pandemic-inspired bubbles” this year by tightening monetary policy, but investors may need to wait until 2024 for relief in the form of Federal Reserve interest rate cuts, say Credit Suisse economists. The Swiss bank’s economics team pointed to housing, cryptocurrencies, special-purpose acquisition companies (SPACs), or “blank-check” companies, as some of the areas where frothy conditions have already fizzled, but also warned investors that “much more probably needs to be done to make monetary conditions properly tight,” in their 2023 outlook.

U.S. home prices shot up 40% during the pandemic, but have sputtered as the 30-year fixed mortgage rate has doubled this year, even briefly topping 7% in November, the highest in 20 years. Related: Mortgage bonds are cheap but ‘no one is buying,’ says BofA Global Home prices also have fallen in some high-price West Coast markets, likely worrying households who bought at peak prices. But there’s also been nothing short of carnage this year in cryptocurrencies, even before November’s stunning implosion of FTX, once one of the world’s largest crypto exchanges. The world’s largest digital coin, bitcoin
was down more than 60% on the year through Friday, according to CoinDesk. That compares with the S&P 500 index’s
near 17% tumble in the same stretch, the Dow Jones Industrial Average’s

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