Macro Bites: Capital allocation priorities ahead of falling interest rates

March 20, 2024

A recent EY survey shows that economic conditions and capital allocation are the top two priorities of corporate board members in 2024. As the Fed’s tightening cycle has likely ended and rate cuts are anticipated later this year, where are companies focusing their capital spending, and what economic conditions will they face as they make those decisions? EY-Parthenon Chief Economist Gregory Daco, EY Americas Strategy and Transactions Vice Chair Mitch Berlin, and EY Strategy and Transactions Partner (Ernst & Young LLP) Katie Johnson discuss these questions and the sector implications.. 

Key takeaways

  • Interest rates are expected to fall in 2024 for the first time in four years, a positive for capital expenditures, hiring and deal making.
  • The expected areas of capital allocation priorities are M&A and productivity-enhancing solutions such as GenAI.
  • Discipline and agility are essential as executives look for the capital investment opportunities that will promote their growth strategy.

Host and featured guests

katie johnson

Katie Johnson
EY Americas Consumer Transactions Leader

gregory daco

Gregory Daco
EY-Parthenon Chief Economist, Strategy and Transactions, Ernst & Young LLP

mitch berlin

Mitch Berlin
EY Americas Vice Chair, Strategy and Transactions

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