Checking our economic crystal ball for 2024. From Marketplace, I'm Nancy Marshall

Genser in for David Bratcchio. Happy New Year. U.S. markets are closed

today for New Year's day. They reopen tomorrow morning at 930, Wall Street time.

What will the New Year bring for the economy? A stock rally, lower interest rates.

Some analysts are predicting economic growth

will slow, bringing inflation under control and giving the Federal Reserve

room to lower interest rates, but take these forecasts with more than a grain of

salt because previous ones have not exactly

held up. Marketplace's Nova Safo has more.

Many analysts, including Michael Gapen of Bank of America, say the post-pandemic U.S. economy has surprised them.

There's been increasing evidence that suggests the economy can do two things at the same time,

continue to grow modestly, but also see disinflationary

pressures. That's not exactly a common scenario and Gapan expects it to

continue this year. We would call that a soft landing where growth slows but we see

recession risk still is being fairly low. This environment, analysts think,

will allow the Federal Reserve to begin reducing interest rates, which are now at more

than 20-year highs.

Bank of America predicts that by the end of this year, the Fed will have cut its benchmark

rate by one percentage point.

Goldman Sachs says it could be one and a

quarter points. Ben Snyder of Goldman expects stocks to rally as interest rates

drop and consumer spending holds up. The most important driver generally of stocks is earnings growth.

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