Goldman Sachs still expects rate cuts from the Federal Open Market Committee (FOMC) in 2024:
- Fed cuts not imminent
- expect future inflation reports to be more subdued
- and were therefore content to forecast a drop in July then in November
GS warns that “even moderate positive surprises could further delay reductions.”
On US stocks:
- Stock valuations are constrained by rising bond yields that reflect investors’ fears of persistent inflation, but even in the face of rising rates, the S&P 500 has returned 6% this year and is just 4% in below its all-time high.
- But stocks can continue to rebound if higher, longer interest rates are driven by resilient economic growth rather than hawkish policy.
- two-thirds of companies beat EPS estimates with an average surprise of 9%
- stream of generally positive microbenefit results
- “We expect earnings growth to lift the index 3% to reach our year-end target of 5,200. While our economists expect continued disinflation that will lead to more rate cuts Late this year, late interest rate cuts are expected to limit stock valuations. »
This article was written by Eamonn Sheridan at www.forexlive.com.
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