Vanguard economic and market outlook for 2024: A return to sound money

Our economic and market outlook for 2024 reflects the house view of Vanguard’s global economics and markets teams as of December 12, 2023.



A return to sound money. It’s a theme we at Vanguard have been communicating for more than a year, and in 2024 we believe that the greater investing world will come around to its implications.

Sound money is the result when interest rates are above the rate of inflation, a development we expect to persist in the years ahead. For well-diversified investors, the persistence of higher real interest rates provides a solid foundation for long-term risk-adjusted returns.


Our outlook in brief:

Policy takes hold

We expect monetary policy to become increasingly restrictive in real terms as inflation falls toward central banks’ targets. As economic resilience fades, central banks will be in position to reduce policy interest rates.

Equilibrium elevated

After policy rates recede from their cyclical peaks, we expect rates to settle at a higher level than we had grown accustomed to before the COVID-19 pandemic. Zero interest rates are gone; a higher-rate environment is here to stay.

Bonds are back

Higher interest rates mean higher returns for long-term bond investors. We see Global aggregate bonds as close to fair value and our long-term return outlook has increased significantly. U.S. equities, meanwhile, and U.S. growth stocks in particular, appear more overvalued than a year ago.

Learn more about our views on the global economic outlook by downloading the 2024 report below.


Download the report.




December 2023