Political and business leaders gather at the 54th Annual Meeting of the World Economic Forum in Davos, Switzerland. #

Chinese Premier Li Qiang, the President of the European Commission Ursula von der Leyen, Ukrainian President Volodymyr Zelenskyy, and U.N. national security advisor Jake Sullivan are among the high-profile speakers addressing delegates at the event.

The official theme of the meeting is “Rebuilding Trust.”

Private company valuations for firms focusing on new technologies, like artificial intelligence (AI), are increasing again. Cisco’s CEO, Chuck Robbins, mentioned that the valuations are soaring and compared the situation to the low interest rate environment during the pandemic. Robbins expressed astonishment at the rapid resurgence of high valuations.

The IPO market might reopen in the second quarter, according to Nasdaq’s CEO, Adena Friedman. She stated that investors are gaining confidence, particularly in small cap companies. Improved valuations, stable to lower cost of capital, and investors seeking to put risk capital to work may contribute to an active IPO market in the coming months.

The International Monetary Fund (IMF) expects interest rates to decrease in the second half of the year. However, Gita Gopinath, the IMF’s first deputy managing director, believes it is too soon to conclude that central banks will significantly cut rates this year. Tight labor markets in the U.S. and Europe are influencing the decision to keep rates relatively stable.

François Villeroy de Galhau, the governor of the Bank of France, emphasized that the European Central Bank’s interest rate cuts are data-driven rather than based on a strict calendar. While the path of inflation remains a concern, Villeroy de Galhau noted that interest rate tightening has been successful so far and suggests a soft landing.

Mario Centeno, the governor of Portugal’s central bank, highlighted the positive trajectory of inflation in the euro zone. He stated that maintaining credibility is crucial in anchoring expectations for medium-term inflation at 2%.

Global leaders gathered to discuss “The High Rate Reality,” focusing on whether high interest rates will become the new normal and the implications for markets. The European Central Bank may delay beginning interest rate cuts in 2024, which contrasts with market expectations. Headline inflation in the euro zone rose to 2.9% in December, exceeding the ECB’s target of 2%.