Stocks are soaring, and according to investing billionaire Ken Fisher, they don’t need the Federal Reserve to cut interest rates to keep climbing. Fisher, the founder of Fisher Investments, pointed to the stock market’s impressive run-up in 2023, despite no rate cuts that year, as evidence that there are other factors at play driving stocks higher.
In a recent video sent to his firm’s clients, Fisher emphasized that investors may have a misunderstanding of how interest rates impact the economy. He highlighted the strength of the stock market in 2023, with the S&P 500 surging more than 20% after hitting a bottom in October 2022. Additionally, the economy has shown resilience, with GDP growing 3.1% in the fourth quarter, according to the Commerce Department.
Fisher argued that the market has already priced in the potential impact of Fed rate cuts, as they are widely discussed and anticipated. While markets are still betting on a 60% chance of rate cuts by the end of 2024, Fisher believes that interest rates are just one piece of a larger economic puzzle.
Despite concerns about high interest rates in 2022, Fisher remains bullish on the stock market, predicting modest double-digit gains for the S&P 500 in 2024. He believes that strong growth and cooling inflation will help the economy avoid a recession, with only a “supersized, surprise” Black Swan event posing a threat to the rally in stocks.
Investor sentiment remains positive, with over 50% of investors feeling bullish about stocks for the next six months. Additionally, a Yale survey found that over 80% of individual investors believe the Dow will end the year higher, marking the most positive outlook on stocks since 2007.
Overall, Fisher’s outlook on the stock market suggests that there are more important factors than interest rates driving the current rally, and investors may not need the Fed to cut rates to keep stocks climbing in 2024.
