It’s Feeling Like a Goldilocks Moment

It’s Feeling Like a Goldilocks Moment

March 25, 2024

Economists describe a Goldilocks economy as one that’s not too hot and not too cold; it’s just right. And 2024 is starting to feel just right.

When the Fed started to raise short-term interest rates in early 2022 to rein in inflation, Chairman Powell’s top priority was to manage consumer prices by slowing economic growth without pushing the U.S. into a recession. The goal was to have a soft landing, or what’s called a Goldilocks moment.

So far, the 2024 economic scorecard looks like Goldilocks 1, Recession 0.

Consumer inflation is slowing, but it’s still above the Fed’s target of 2%. Gross domestic product is solid, with the Atlanta Fed’s GDPNow showing Q1 growth forecast of 2.1%. And payrolls increased by 275,000 jobs in February, which means companies are hiring. Taken together, all three suggest no recession in sight at this point.1,2

Meanwhile, the Standard & Poor’s 500 stock index continued to improve in March, broadening the rally across sectors beyond the AI darlings like NVDA and META. Keep in mind the stock market is a discounting mechanism, meaning it’s anticipating what the economy will look like in 6-9 months, which has some wondering if Goldilocks may kick off her shoes and stay a while. Remember that past performance is no guarantee of future results.3

So what’s next? At Sierra Pacific Financial Advisors we're excited about how the economy looks and optimistic about the future. Think back to the August/September 2023 timeframe when nothing seemed to go right for the economy and the financial markets.

It’s fair to say that we are hopeful for the balance of the year. We also hope the three bears take a longer-than-expected walk in 2024! But whether hot, cold or just right, as a NAPFA member, Sierra Pacific Financial Advisors plan and manage client portfolios for success in all conditions within public and private/Alternative Investment markets.

1. CNBC.com, March 12, 2024. “Consumer prices rose 0.4% in February, and 3.2% from a year ago.”
2. CNBC.com, March 8, 2024. “U.S. job growth totaled 275,000 in February but unemployment rate rose to 3.9%.”
3. WSJ.com, March 12, 2024. “S&P 500 Hits New Record After Hot Inflation Data.”