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Even the best financial predictions can fall short.
There was a lot of concern about high interest rates and geopolitical tensions.
Inflation was slowing down but still high.
All of this seemed to spell doom.
But the markets surprised everyone.
The S&P 500 posted strong gains, some of the strongest in decades.
Consumer spending was high and corporate performance was better than expected.
Tech stocks, in particular, got a boost from the artificial intelligence gold rush.
This would be an obvious move for the Fed to make if they wanted to stimulate the economy.
Some even thought there would bemultiple rate cutsin the first six months of the year.
While this was directionally right, many forecasts on thetiming and numberof cuts were wrong.
Instead, the Federal Reserve held its ground, keeping higher rates for the first half of the year.
With consumer spending high, and growing wages, the central bank prioritized stability over stimulus.
There Would Be a Recession
Heading into 2024, everyone thought a recession was inevitable.
The consensus was that these factors would come together to trigger a recession early in the year.
No recession has materialized yet, Michalka stated.
The U.S. economy defied expectations.
Its true that there was slow growth in some sectors, but the economy remained steady overall.
This resilience baffled experts who had spent months warning of an imminent recession.
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