Goldman Sachs still expects interest rate cuts from the Federal Open Market Committee (FOMC) in 2024, the bank says:
- The Fed's cuts are not imminent.
- We expect the next few inflation reports to be softer.
- Therefore, they stuck to the expectations of a cut in July and then in November.
- Goldman Sachs warned that even moderate bullish surprises could further delay the cuts.
As for their expectations for US stocks, they were like this:
Stock valuations are constrained by rising bond yields reflecting investors ' concerns about persistent inflation, but even in the face of rising rates, the S & P 500 is back 6% this year and is only 4% below its all-time highs.
But stocks can continue to rise if long-term high interest rates are driven by resilient economic growth rather than hawkish policy.
Two-thirds of companies exceeded earnings per share estimates by an average surprise of 9%, and we have a deluge of generally positive partial earnings results.
We expect earnings growth to bring the index up by 3% to our year-end target of 5200. While our economists expect a continued decline in inflation that will lead to interest rate cuts later this year, delayed interest rate cuts will constrain stock valuations.
