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2024 market and economic outlook: The era of extremes is over

Russell Price, Chief Economist – Ameriprise Financial
Anthony Saglimbene, Chief Market Strategist – Ameriprise Financial
Jan. 01, 2024

The post-pandemic years have been filled with extremes: an economic shutdown; a bull market; a bear market; spiraling inflation; aggressive interest rate hikes; global unrest; and more.

But there soon may be a light at the end of the tunnel.

After years of incredible highs and lows, 2024 is likely to return to a degree of normality not seen in a while. However, the environment is fluid and new developments may require investors to reset their expectations.

Here are our top projections for the U.S. economy and financial markets:

The economy

Getting inflation back under control is key to the health of the U.S. economy in 2024. Overall, we remain optimistic about that possibility. Here are our key projections:

  • Slower economic growth … but that’s OK. We currently forecast U.S. economic growth to downshift materially in 2024. However, we believe a slower pace would be a healthy outcome for an economy that in 2023 was still experiencing repercussions from the global pandemic, and the fiscal and monetary policy responses that followed.
  • Inflation will likely return to normal. The large spikes in demand, extremes in spending patterns and shocks in supply have run their course. Overall, significant progress on inflation was made in 2023 and we expect that to continue into 2024. We forecast inflation rates to reach 2% — the level that the Federal Reserve deems an appropriate amount of inflation — by mid-2024.
  • Gradual interest rate cuts are possibly on the horizon. Since last hiking their overnight lending rate in July, Fed officials have been on pause. A further easing of inflation pressures should allow Fed officials to begin cutting their overnight lending rate by mid-year. 
  • Fundamentals will continue to be supportive. Economic fundamentals, particularly consumer debt burdens, are in good shape heading into the new year, in our view. Similarly, the job market remains strong, though there’s room for the unemployment rate to rise modestly in the quarters ahead.
  • While a U.S. recession is possible, it’s not probable. We believe the possibility of a recession over the next year is likely about 35%, as compared to the 15% odds prevalent at any given time. If a recession were to occur, it would likely be relatively shallow and short-lived.

The markets

In a world where growth remains positive, inflation is moderating back to normalized levels and interest rates are stabilizing (possibly even heading lower), stock and bond prices have an opportunity to perform well in 2024. Here are our key projections:

  • Corporate profits are expected to march higher over the coming year. In an environment where economic conditions are stable and interest rate pressures are easing, we believe corporate earnings growth could improve and allow stock multiples to expand.
  • Lower interest rates could be a tailwind for stocks. Just as the sharp upswing in interest rates was a strong headwind for economic activity and financial market results in the last two years, we believe falling rates should offer solid support to business activity and financial market performance in the quarters ahead.
  • As the 2024 presidential elections draw nearer, there may be more noise in the markets. Regardless of the upcoming election result, fiscal policy in 2024 should remain status quo — which could be market-friendly.
  • If an economic downturn were to occur, long-term opportunities could form. In our view, a possible economic downturn should leave room for longer-term investment opportunities if investors can look through a potential period of volatility should conditions deteriorate more than expected. Focus on high-quality investments and areas that languished for most of 2023.

Start 2024 strong with your financial advisor

While it’s impossible to predict the future, connecting with your Ameriprise financial advisor can give you more confidence as you navigate what’s ahead. They will help you make sense of economic and market developments and provide personalized recommendations to take advantage of the current environment.

The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Ameriprise Financial associates or affiliates. Actual investments or investment decisions made by Ameriprise Financial and its affiliates, whether for its own account or on behalf of clients, will not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not account for individual investor circumstances. 


Some of the opinions, conclusions and forward-looking statements are based on an analysis of information compiled from third-party sources.  This information has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Ameriprise Financial. It is given for informational purposes only and is not a solicitation to buy or sell the securities, accounts or strategies mentioned. The information is not intended to be used as the sole basis for investment decisions, nor should it be construed as advice designed to meet the specific needs of an individual investor. Please seek the advice of a financial advisor regarding your particular financial situation.


The fund’s investments may not keep pace with inflation, which may result in losses.


A rise in interest rates may result in a price decline of fixed-income instruments held by the fund, negatively impacting its performance and NAV. Falling rates may result in the fund investing in lower yielding debt instruments, lowering the fund’s income and yield. These risks may be heightened for longer maturity and duration securities.


Stock investments involve risk, including loss of principal. High-quality stocks may be appropriate for some investment strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with investing in stocks, as they can lose value.


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