As 2024 comes upon investors faster with every day, experts are now believing the Fed may reach its inflation mandates and promote GDP growth in the new year with a recession.

Yardeni Research President Ed Yardeni explains the economy has been more resilient than even he expected, reconsidering his past recession calls.

"It's almost contrary to agree with the Fed, and I've been a contrarian saying the Fed may actually get it right. Inflation may come down and they may get it without a recession," Yardeni tells Yahoo Finance.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: When we talk about the naysayers consensus, we have a lot of smart economists and strategists on it. And when they look out to 2024, many think the Fed is going to stick this soft landing. You know, of course, consensus 12 months ago, Ed, was, I think you had a lot of people saying we were going to hit a recession. So make a consensus, what you want, but what do you see in 2024? Are you predicting a soft landing?

ED YARDENI: Yeah, well, I started out last-- this year by saying that we're in a recession. Actually, I should say, 2022, I said, we're in a recession. It's just a rolling recession hitting different industries at different times. And I figured that on balance, the economy would continue to grow, and it's turned out to be even more resilient than I thought. I mean, I didn't expect 4.9% growth in real GDP in the third quarter. Things are simmering down now. They're slowing down somewhat. And I think there's a lot of people watching the Fed, and a lot of people tend to be very critical of the Fed. It's almost contrary to agree with the Fed.

And I've been a contrarian, saying the Fed may actually get it right. Inflation may come down, and they may get it without a recession. And so next year, I think we're looking at a 2% growth for real GDP, inflation maybe 2% to 3%. So I'm very optimistic that inflation is going to continue to decline. And in that scenario, the bonds-- the bond yield has peaked, and bonds should kind of hang around here. And stocks are probably going higher. I got 5,400 on the S&P 500 by the end of next year.

JULIE HYMAN: That is definitely a loftier target than we've heard from some other folks. I mean, as you say, people love to hate on the Fed and criticize the Fed. And they also love to guess what the Fed is going to do, right? There's what the Fed has told us through its dot plot, what it's going to do next year in terms of cutting rates. And there's what everybody's guessing they're going to do. How do you see that trajectory working out?

ED YARDENI: Well, again, I've been kind of agreeing with the Fed's view of things. And back, I think it was in June, they changed their numbers for what they're going to do next year. Instead of four rate cuts, they are now talking about two rate cuts. I think that's a very plausible scenario. And I think the economy has demonstrated that it can handle 4 and 1/2% to 5% bond yields, which is what we have. And that's what we had before the great financial crisis. So we're kind of going back to normal, which is kind of refreshing, don't you think?