2023 Recap and 2024 Outlook: Key Events and What May Be in Store

by | Nov 20, 2023

As we get ready to turn the page on 2023 and welcome the new year with all its possibilities, we’d like to take some time to reflect on the year that was—the notable events, trends, and developments that defined our economics, policy, business, and culture—and look a bit into the future to see what 2024 might bring.

2023 in Review

Economy & Markets

The economic picture in 2023 continued to be dominated by inflation and the Federal Reserve’s response to it. Inflation declined from 40-year highs but remained above the Fed’s 2% target. This led to more short-term interest rate hikes, with the Federal Funds Effective Rate reaching a 22-year high of between 5.25% and 5.5% as we approach year’s end.1,2

Stocks rebounded from the bear market of 2022 and rallied during the first half of 2023. Stocks pulled back during the fall due to concerns about the outlook for inflation and fear that the Federal Reserve may keep short-term rates “higher for longer” than the market anticipated.3

In March, a few regional banks—beset by poor internal decision making and risk controls—were moved into receivership by the Federal Deposit Insurance Corporation (FDIC). The issues first came to light with Silvergate Bank and Silicon Valley Bank (SVB), the latter catering to venture capital technology companies in Silicon Valley. With $209 billion in assets, SVB was the second largest U.S. banking failure ever, but moves by the Federal Reserve, the FDIC, and the Treasury Department appeared to avert a contagion of bank runs. Large money center banks also worked together to help manage the situation.4

Any companies mentioned are for illustrative purposes only and should not be considered a solicitation for the purchase or sale of securities. Any investment should be consistent with your objectives, timeframe, and risk tolerance.

Labor disputes

The Writers Guild of America went on strike in an effort to help seek protection against the use of artificial intelligence (AI) and to seek increases in compensation for streamed content. The Screen Actors Guild-American Federation of Television and Radio Artists also went on strike for higher pay, residual pay for streaming shows, protection from AI, and improved conditions for virtual auditions.5

The United Auto Workers (UAW) also went on strike, hitting the big three U.S. carmakers simultaneously for the first time. The UAW’s key demands include wage increases, reinstating cost of living protections, and job security in the transition to electric vehicles (EVs).6


A Republican majority in the House of Representatives set the stage for a divided government in 2023. With Democrats retaining control of the Senate and the Presidency, some legislation stalled. Gridlock also created disputes over the debt ceiling and government spending as the two parties negotiated.

The government continued to support aid to Ukraine in its war against Russia. However, as the war continued, questions about the level and accountability of spending going forward have been raised.

Business & Technology Trends

Remote and hybrid work became standard for many, despite some corporations attempting to reverse this trend and get staff back into the office.

AI and machine learning went mainstream with the mania surrounding ChatGPT. Launched late last year, ChatGPT reached 100 million monthly active users in just two months, making it the fastest-growing consumer application in history. AI has gained the attention of corporate leaders, scientists, government regulators, and the public.7

As previously mentioned, any companies mentioned are for illustrative purposes only.

Sales of fully EVs in the US are expected to break the 1 million vehicle barrier in 2023 for the first time ever. Price cuts, wider variety, and more government and manufacturing incentives have helped boost EV sales.8

Global Affairs

Russia’s invasion of Ukraine entered its second year. Meanwhile, tensions grew between the US and China over China’s stance towards Taiwan. North Korea ramped up missile tests to historic levels. King Charles III was crowned in May, following the death of Queen Elizabeth II, the UK’s longest-reigning monarch.

Human Interest

There was something for everyone when it came to human interest stories and pop culture in 2023. Succession bowed out with a riveting finale, and Elon Musk continued to make headlines with X, which was formally known as Twitter. And peace appeared to return to the golf world when the PGA and LIV tours merged.

But what happened in movie theaters and concert venues over the summer had real-world implications. According to Morgan Stanley, there was a notable impact on consumer spending and the broader economy in the third quarter due to Taylor Swift’s and Beyoncé’s tours, as well as movie blockbusters Barbie and Oppenheimer.9

Barbie became the highest-grossing release in the US this year and together with Oppenheimer contributed to the fourth-biggest opening weekend box office in U.S. history. Taylor Swift’s and Beyoncé’s tours filled stadiums nationwide, with Swift’s tour gaining particular attention for its costly resale market and ticket purchasing fiasco. And then the budding romance between Swift and football player Travis Kelce took over the headlines in the sports and entertainment worlds. The power of her influence was immediately felt, with the price of Kelce’s Kansas City jersey shooting up 400%!10

What to Watch for in 2024

Economic Outlook

The Fed is expected to keep rates elevated longer than many anticipated to get inflation down to its 2% target. This has pressured the housing market and other interest rate-sensitive parts of the economy.

With 2024 being a presidential election year, markets will be watching closely. The S&P 500 has had a positive return in 19 of the last 23 election years since 1928 or 83% of the time. Past performance does not guarantee future results.11

Policy and Regulatory Outlook

With a split Congress, major legislation may be limited. All attention will turn to the 2024 elections, where the presidency, the entire House of Representatives, and 34 Senate seats will be on the ballot. The balance of power is expected to have far-reaching implications on everything from taxes to immigration to climate policy. Expect markets to anticipate results and try to determine which industries and companies could be in or out of favor.

2024 Tax Policy Outlook

The divided government makes it difficult to reach a consensus on tax code changes. Still, the pending 2025 expiration of many of the provisions of The Tax Cuts and Jobs Act (TCJA) of 2017 may be a point of debate. If not extended, there could be implications for capital gain levels, estate tax exemptions, state and local tax deductions, and individual rates and brackets.

When passed in 2017, the TCJA lowered most individual income tax rates, including the top marginal rate, from 39.6% to 37%. The law maintained the seven-bracket rate structure, but the income thresholds were updated.12

Business and Technology Trends

AI may become more mainstream as industries consider using the technology to streamline operations and increase efficiency. While there are concerns about job losses and other disruptions, AI may have benefits in healthcare and education. AI is not going away, and its societal implications are unfolding in real time.

EV sales should continue to grow as long as incentives remain high, costs come down, and charging infrastructure improves.

More Human Interest

Next year, will see the Summer Olympics in Paris. Movie theaters will be busy with the big screen adaptation of the Broadway musical Wicked, Dune: Part Two, and a truckload of superhero, animated, and horror movie sequels. On television, get ready for new seasons of House of Dragons, Stranger Things, and Squid Game.

And mark your calendar for April 8, when a total solar eclipse will be viewable in the central and northeastern US.

A Look Ahead & Back

Whether it was your best year or a less-than-perfect year, 2023 was far from boring! There was plenty of economic uncertainty, with the longer-term impact of higher interest rates still to be seen. We will have to see if the Fed can pull off a “soft landing” and keep the country out of recession. Meanwhile, the presidential election will start to gain momentum early in the year, which may add to the uncertainty.

As financial professionals, one of our jobs is to help clients better understand how current events can influence financial markets.

Let us take this opportunity to wish you a happy holiday season and a safe and prosperous new year.

  1. Statista.com, October 23, 2023
  2. TradingEconomics.com, October 23, 2023
  3. Finance.Yahoo.com, October 23, 2023
  4. Business Insider, March 13, 2023
  5. Deseret News, September 26, 2023
  6. NPR , September 20, 2023
  7. Reuters, February 2, 2023
  8. EnergyConnects.com, January 12, 2023
  9. CNBC, August 31, 2023
  10. RollingStone.com, September 26, 2023
  11. Forbes, January 31, 2020
  12. TaxFoundation.org, 2023
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