In 2024, the macroeconomic landscape is poised for several key developments (yes, I understand I’m writing this nearly two months into the year. Get over it).

Here’s the TLDR of my four predictions: The Federal Reserve will not lower interest rates until Q4 of 2024 The Stock Market will continue to grow throughout 2024 The Real Estate market will continue to go up as demand pressures increase Bitcoin will surpass $100k USD

The Fed will not lower Interest Rates until Q4 of 2024

Currently, the federal funds futures is predicting five rate cuts of 25 basis points in 2024 starting around the April 30 - May 1 meeting. I believe this will prove to be too early as the market has been screaming for a rate cut since mid 2023 and has continually been wrong. This is Jerome Powell’s “Volcker moment” where he will keep rates higher for longer, which has been his mantra since the start of rate hikes in the not so distant past. Powell briefly mentioned that the Fed has begun discussions on when to begin the pull back and begin rate cuts, which had the pivot bros jumping for joy. Let’s make this clear: there has never been a question if Powell would ever cut interest rates. This seems obvious. But for some reason, the pivot crowd will continue to scream for a pivot and will eventually be correct as it is par for the course.

In my opinion, inflation is sticky. Prices are elevated and are not coming down. Student loan payments are now in full swing and housing affordability is at a new low of 15.5% percent according to Redfin, which is the lowest in a decade since Redfin started tracking it. The consumer cracks are beginning to surface, but as I will state later in this article, I believe the market delusion will continue throughout this year. This will cause Powell to have mixed emotions about the rate cut. The stock market, labor market and other indicators will show everything is more resilient than many with boots on the ground will believe. With all this being said, it will allow Powell to keep rates higher for longer, but not allow a cut to wait until 2025.

The Stock Market will continue to go up

Look, this prediction may be cheap because it is already 2 months into the year and companies like NVDA are just absolutely tearing it up year to date (see below), but as we are all well aware the market can make a turn in the opposite direction quickly.

The stock market narrative has been that the market has been propped up by the “magnificent 7”, but I feel this delusion will continue. The stock market in 2023 was up 24% which was higher than 2020 when 40% of the current M2 money supply was printed. I believe we are heading towards an “Artificial Intelligence Boom”. The way I’ve seen these past two decades can be described as multiple cycles living on some hopium and delusion: the Dot Com Boom, Financial Crisis of 2008, the Crypto Boom of 2015 to 2020, the COVID-19 crash, and now the Artificial Intelligence boom. NVDA is a perfect example of what is currently going on: we are moving to a nearly entirely digital world in which we will need data centers, high power computer chips, storage, and efficient solutions. Artificial intelligence is just one arm of the developing digital landscape we are living in, but it will be a major player in efficiency. Right now companies like NVDA are profiting because of the growing need for data centers, Bitcoin miners, and stronger computer power. A. I. will be in need of stronger computers to solve more complex problems and issues. The efficiencies that A.I. can bring cannot be understated or even understood at this point. I believe there are some avenues that A.I. have yet to be explored, but at the end of the day majority of A.I. projects will fail. That is just the reality of the situation. Majority of start-ups fail and the majority of these projects that get funded will fail as well. It will be about the companies that can either afford to go through the ups and downs of development of the A.I. projects or the best projects rising to the top. In the end the hopium will last for the entire year and I believe we’ll see more companies fail at developing A.I. related projects in the coming years, therefore the delusion will live on for 2024.

Real Estate will continue to go up and get more unaffordable

As mentioned in the rate cut prediction above, housing affordability is the lowest it has been in a decade at 15.5%. This does not mean that housing will all the sudden slow down in my opinion. Housing will continue to go up as the underlying currency is getting devalued and assets, especially hard assets will continue to go up. Housing has always been interesting in the United States and will likely continue to be region based and you can find value in the market no matter the timing, but in general I believe it will continue to go up. Especially with interest rates going down towards the end of the year (if that prediction is correct or even if I’m wrong and the cuts come earlier) the mortgage interest rates will come down thus lowering the monthly payment for the price of the house. Housing in many areas has remained flat with increased mortgage rates and therefore it seems like the logical that once mortgage rates fall, housing prices will increase. With every crisis, asset holders (generally the wealthy or upper class) will see assets appreciate and the middle and lower class will lose purchasing power. This trend tends to kill the middle class over time, but how long will the charade continue? I believe the powers that be will continue this charade for the next 20 or so years, but slowly people are starting to wake up. The American dream of the white picket fence will shift to something about travel and being independent which will have an increase in short term stays whether it be in Airbnb or mid term rentals and homeownership will be something of the past.

The way I see this prediction become incorrect is if the trend to bring workers back into the office continues. I see there is a growing desire for remote work or to live in thriving cities but the reality is, those cities are becoming more unaffordable. With all of this being said, I believe in the short term (1 year time period) housing will generally increase.

Bitcoin price will surpass $100k To the Bitcoin haters, of which there are many, will scoff at this prediction. To the Bitcoin maximalist, they will love this prediction. Price action is difficult to predict in such a young asset class and many will try to sway you with certainty, but there are many macro factors that I believe point to this. Interest rates will fall, the Bitcoin halving will occur in April, and the price action from the Spot Bitcoin ETF has yet to be realized. Since the inception of the Bitcoin Spot ETF we have seen the fund reach $3 billion (yes, billion) in the first 30 days (which has never been done which has been done by both the BlackRock and Fidelity Spot ETFs) and the buying flows are currently buying 12.5 times the amount of Bitcoin being produced by miners on a daily basis. The buying pressure is continually increasing all with the halving upcoming in April. For the newbies, the Bitcoin that is being produced by Bitcoin miners on a daily basis cuts in half every ~4 years and that occurrence is known as the halving and will occur in April.

There is less than 10% of Bitcoin left to be produced, so from a pure halving perspective I do not believe the halving is the only driver of price action. But, if the buying continues at this rate there is only one way the price in USD will go. Money will begin dumping into Bitcoin AND into companies building on Bitcoin. Many traditional finance venture capitalists will start to find a way into the Bitcoin space and consequently the crypto space as well. Another bull run is upon us but the biggest difference is I believe the regulation around shitcoin casinos (crypto exchanges for the kids at home) will drastically reduce the amount of “paper” Bitcoin issued that was previously issued by the likes of FTX, Celsius, etc. Buckle up boys and girls, we’re about to take off.