What would interest rate cuts mean for portfolios?

FRESH FROM a market rally in the final six weeks of last year, market participants began 2024 with a degree of optimism as the downward trajectory of inflation, and the potential for interest rate cuts, promised to provide some relief for a heavily indebted world.

It should be noted, however, that interest rate cuts are normally associated with an economic slowdown. In such an environment, more accommodative monetary policy is needed to stimulate growth and prevent the slowdown tipping into a full-blown recession.