Factbox-What to expect in 2024: Fed pivot, cooling inflation, easing growth
FILE PHOTO: Dollar, Euro and Pound banknotes are seen in this picture illustration taken April 28, 2017. REUTERS/Dado Ruvic/Illustration/File Photo
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(Reuters) -Global growth will likely slow in 2024 but a dovish tilt in the Federal Reserve’s rhetoric has raised hopes for the U.S. economy and brightened the outlook for riskier assets, according to big banks.
The European Central Bank and the Bank of England sticking to their higher-for-longer rates stance, however, has blurred expectations for Europe.
Following are forecasts from some major banks and peers on economic growth, inflation, Fed policy and how they expect certain assets classes to perform.
Real GDP growth forecasts for 2024
GLOBAL U.S. CHINA EURO UK INDIA
AREA
Goldman 2.60% 2.10% 4.80% 0.90% 0.6% 6.3%
Sachs
Morgan 2.80% 1.90% 4.20% 0.50% -0.1% 6.4%
Stanley
UBS Global 2.60% 1.10% 4.40% 0.60% 0.6% 6.2%
Wealth
Management
Barclays 2.60% 1.20% 4.40% 0.30% 0.1% 6.2%
J.P.Morgan 2.20% 1.60% 4.90% 0.40% 0.2% 5.7%
BofA 2.8% 1.4% 4.8% 0.50% 0.1% 5.7%
Global
Research
Deutsche 2.4% 0.6% 4.7% 0.20% 0.3% 6.0%
Bank
Citigroup 1.9% 1.1% 4.6% -0.20% -0.30% 5.7%
—-
U.S. inflation and Fed forecasts:
Latest data showed that in the 12 months through November, U.S. consumer prices increased 3.1%, slowing from a peak of 9.1% in June 2022. The Fed targets an inflation rate of 2%.
The central bank’s main rate currently stands in the 5.25%-5.50% range after 525 basis points of hike since March 2022. Rate cuts are seen coming as early as March.
U.S. inflation (annual Federal funds
Y/Y for 2024) target rate (Dec
’24)
Headline CPI Core PCE
Goldman Sachs 2.40% 2.50% 4%-4.25%
Morgan Stanley 2.10% 2.70% 4.375%
UBS Global 4.50%-4.75%
Wealth
Management
Wells Fargo 2.50% 2.60% 4.75%-5.00%
Barclays 2.70% 4.5%-4.75%
J.P.Morgan 2.50% 2.50% 4%-4.25%
BofA Global 2.80% 4.25%-4.50%
Research
Deutsche Bank 2.10% 3.63%
Citigroup 2.60% 4.50%
——
Forecasts for stocks, currencies and bonds:
S&P 500 US 10-year EUR/USD USD/JPY USD/C
target yield NY
target
Goldman Sachs 5,100 4.55% 1.10 150.00 7.15
Morgan Stanley 4,500 1 140 7.5
UBS Global 4,700 3.50% 1.12 140 7.00
Wealth
Management
Wells Fargo 4,600-4, 4.75%-5.25 1.08-1.1 136-140
800 % 2
Barclays 4.25% 1.09 145 7.20
J.P.Morgan 4,200 3.75% 1.13 146 7.15
BofA Global 5,000 4.25% 1.15 142 6.90
Research
Deutsche Bank 5,100 4.10% 1.10 135
Societe 4,750 3.75% 1.15
Generale
Citigroup 5,100 4.30% 1.02 135 7.25
HSBC 5,000
As of 1504 GMT on Dec. 18, 2023:
S&P 500: 4736.41
US 10-year yield: 3.9614%
EUR/USD: 1.0926
USD/CNY: 7.1348
USD/JPY: 142.97
