US CPI continues to cool down, Morgan Stanley advises investors to "stay in the stock market"
Morgan Stanley strategist David Kelly believes that patient investors can achieve higher returns from the stock market as inflation rates approach 2% by the end of 2024. The bond market can also provide investors with stable capital gains.
The United States continues to see a cooling trend in inflation, and JPMorgan is quite optimistic about the future performance of US stocks and bonds, advising investors to "stay in the stock market."
According to the July CPI report released on Thursday, the core CPI increased by 0.2% MoM as expected, marking the lowest monthly growth rate in over two years. According to JPMorgan strategist David Kelly, this provides strong evidence supporting the Federal Reserve's decision to pause rate hikes in September, which gives the market a reason to be optimistic.
Kelly believes:
With inflation heading towards 2% by the end of 2024, patient investors can gain more returns from the stock market, and the bond market can also provide stable capital gains for investors.
Regarding the future inflation trend, Kelly firmly believes that even without the pressure from the Federal Reserve, the inflation rate will naturally decrease to 2%. He emphasizes the impact of time on investments:
The decline in inflation takes some time. We are heading towards a slow growth environment, which looks similar to the situation ten years ago.