Good morning, and Happy 2024.
Count me among the many who got the economy wrong in 2023. I saw little reason in history to think inflation could be beat without a downturn, and I predicted the Fed Funds rate would end up over 6%.
But the “inflation is transitory” crowd turned out to be right—it took longer than they expected and a bit of nudging from the Fed, but inflation did come down and the economy stayed strong. I was closer to correct on Generative AI—it exploded onto the business scene unlike any technology preceding it.
So plenty of reason to be humble about predictions for 2024. But here are a few: The markets see sunny skies ahead, but I’m more skeptical. I wrote a year ago that we shouldn’t “be surprised if the (Fed’s) flood of free money led to some massively bad bets.” I still think that’s true—there are some naked swimmers out there yet to be discovered. (Keep an eye on office real estate.)
And while Generative AI clearly holds the potential to transform both business and society for the better, I think—or at least hope—we’ll spend more time in 2024 on its flaws, particularly the fondness for “hallucination.” A number of smart tech-watchers assured me a year ago this problem would be solved by now. It’s not. Others had the chutzpah to argue it was a feature, not a bug. But check out this recent story about a law brief filed in the Michael Cohen case. Facts matter, and our latest romance with technology that likes to make stuff up is a new reason to worry.
Finally, here’s an easy one: Politics and geopolitics will be big business stories. Wars are already raging in two important regions of the world, and contentious elections are scheduled this year covering more than 40% of the world’s population.
And the two are related, with immigration—much of it from people fleeing wars and failed regimes—remaining a top political issue. But here’s an interesting fact, courtesy of The Economist, to help you steer through the noise: The share of the world’s population that lives outside their country of birth is just 3.6% and has barely changed in the last 75 years.
More news below. And if you are still working on resolutions for the New Year, check out the latest in Fortune Well.
Alan Murray
@alansmurray
alan.murray@fortune.com
