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I'm your host, Ivana Hampton. Many investors watch 2023 unleash highs and lows, interest rates rose and stopped while inflation dipped. AI stops boomed, and the 10-year U.S. Treasury yield rolled a rollercoaster. Tom Laura Sello will review this year's market trends and discuss what to expect next year. He is Morningstar Inc's global markets editor and smart investor newsletter editor. Good to see you,

Tom. Great to be here.

The Fed held interest rates at their final meeting of the year, as expected. They also signaled three cuts next year. The markets rallied. What do you make of this enthusiasm?

The markets certainly liked what the Fed had to say. They probably took it a little bit further than the Fed had to say. In fact, maybe even further than the Fed might potentially want. The markets are pricing in a pretty aggressive series of rate cuts next year. Either way, the Fed has made a pivot to saying that they're going to be lowering rates as their next move. That's a change. That's a significant one for the markets, as long as it sticks, as long as inflation doesn't start to creep back up. That means that this incredibly aggressive rate hike cycle is likely over. There's definitely some good news there for the markets, and it allows for some re-pricing into that lower rate environment.