Rate-sensitive cyclical stocks could see a significant rally and outperform the broader market as the Federal Reserve prepares to lower interest rates following the latest benign inflation data, according to a report by Bank of America. “Last week, inflation ticked another box for the Fed,” said economist Stephen Juneau, noting that June’s inflation reading provided the most substantial downside surprise compared to analyst estimates since 1998. Path To ‘Goldilocks’ In 2024 Bank of America suggests we are “on the path to Goldilocks in 2024.” The bank describes a scenario with moderating but stable macroeconomic conditions and a cooling consumer price index (CPI). In this kind macroeconomic environment, “the stars are aligning for the rotation into rate-sensitive cyclicals,” stated equity analyst Ohsung Kwon. Kwon highlighted that easing rate pressure, Fed-supported growth, and broadening earnings as the “Other 493” companies emerge from ...