Dealmaker professionals in Big Law are keeping a close eye on various factors, including interest rates and inflation, as they evaluate prospects for the 2024 M&A market. According to recent analysis, if predictions for interest rate reductions in 2024 pan out, they could instill greater confidence among business leaders and potentially prompt an uptick in M&A activity.
In addition to interest rates, these Big Law dealmakers are also paying careful attention to inflation trends. As per Federal Reserve data, it is expected that inflation will unravel gradually, aiming to hit 2.4% in 2024, moving down to 2.2% in 2025, and then reaching the target rate of 2% by 2026. This tempering of inflation, combined with a more optimistic economic outlook, could provide a much-needed boost to M&A activity in 2024. Frank Aquila, a partner in Sullivan & Cromwell’s corporate group, emphasised the potential positive implications of this economic trend.
This comes after the 2023 M&A market experienced lower volumes in comparison to previous years, leading dealmakers to consider a larger picture involving multiple markers in their predictions for 2024.