The US Federal Reserve (Fed), led by Chairman Jerome Powell, cut interest rates by a significant 50 basis points (bp) at its September 17-18 meeting.
The move was aimed at reinforcing the central bank’s commitment to maintaining low unemployment as inflationary pressures ease.
Looking ahead, Fed officials expect the benchmark interest rate to be cut by another 0.5 percentage points by the end of 2024, 0.5 percentage points in 2025, and another 0.5 percentage points in 2026. involves considerable uncertainty.
Major banks have released their forecasts on economic growth, inflation and the performance of various asset classes. He expects the target to be between 4,200 and 6,000. Targets for the 10-year U.S. Treasury yield vary, with Goldman Sachs and UBS Global Wealth Management expecting a yield of 3.85%, while HSBC expects a lower yield of 3.00%.
The expected exchange rate range is 1.05 to 1.13 and the exchange rate range is estimated to be 135 to 160. The expected exchange rate is between 6.95 and 7.50.
Regarding US inflation, banks expect annual headline CPI and core PCE to fluctuate in 2024, with Goldman Sachs expecting both to be 2.6%, while Morgan Stanley expects headline CPI to be 2.10%. %, and core PCE is expected to be 2.70%. The highest forecast comes from BofA Global Research, which predicts composite CPI to be 3.5% and core PCE to be 2.8%.
World real GDP growth rates for 2024 also have mixed forecasts. Goldman Sachs projects U.S. GDP growth at 2.8%, while Morgan Stanley’s forecast is more conservative at 1.9%.
Forecasts for China are generally optimistic, with estimates ranging from 4.2% to 5.0%. Growth forecasts for the euro area are modest, with most banks predicting less than 1.0%. Outlook for UK gross domestic product (GDP) growth is mixed, with some banks including Morgan Stanley predicting a 0.1% contraction. The Indian economy is expected to perform well, with growth expected to be between 6.3% and 7.3%.
UBS Global Research and UBS Global Wealth Management, independent divisions within the UBS Group, issue separate forecasts. UBS Global Research predicts the US GDP will grow 2.5% and China 4.6%, while UBS Global Wealth Management predicts the US GDP will grow 2.4% and China 4.9%.
These forecasts from leading financial institutions provide an outlook on the expected economic outlook for 2024, reflecting continued efforts to balance growth with inflation and interest rate policy.
Reuters contributed to this article.
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