Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivan and Hampton. Many investors watch 2023,

unleash highs and lows. Interest rates rose and stopped, while inflation dipped. AI stocks boomed,

and the 10-year U.S. Treasury yield rode a roller coaster. Tom Lorcella will review this year's market

trends and discuss what to expect next year. He is Morningstar, Inc.'s global markets editor and smart

investor newsletter editor. Good to see you, Tom. Great to be here. The Fed held interest rates

at their final meeting of the year, as expected. They also signaled three cuts next year. The

markets rallied.

What do you make of this enthusiasm?

Yeah, the markets certainly liked what the Fed had to say.

They probably took it a little bit further than the Fed had to say,

and in fact, maybe even further than the Fed might potentially want.

The markets are pricing in a pretty aggressive series of rate cuts next year.

But either way, the Fed has made a pivot to saying that they're going to be lowering

rates as their next move.

And that's a change.

And that's a significant one for the markets markets as long as it sticks, as long as

inflation doesn't start to creep back up. That means that this incredibly aggressive rate

rate hike cycle is likely over. And so, you know, there's definitely some good news there

for the markets and it allows for some rep repricing into to that lower rate environment.

Now Morningstar senior U.S. economist Preston Caldwell, he's predicting six rate cuts next year.

He says declining inflation has given the Fed confidence to pivot. Yet housing inflation is still high.

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