The Federal Reserve is expected to lower interest rates by 75 basis points this year, according to Jinshi Data, after Goldman Sachs experts had previously predicted a 100-basis point decrease. This prognosis reflects expectations of a sustained decline in core inflation and is more dovish than current market pricing
Goldman Sachs revised its interest rate decrease projections, reducing them from 100 basis points to 75 basis points. The bank attributes the more cautious prediction in large part to a diminishing prospective inflation rate. Economists are skeptical that the incoming administration’s policy changes would cause interest rates to rise significantly.
Expected lower rate decreases fit with the Federal Reserve’s cautious strategy, balancing inflation management and economic outlook. Since stocks and alternative assets like cryptocurrencies often gain from a lower-rate environment, this dovish posture may create a favorable climate for them.
The Federal Open Market Committee (FOMC) meetings that are scheduled to take place in the near future will be keenly monitored by investors in order to get indications about modifications to monetary policy in light of the changing economic circumstances.
Goldman Sachs has published a report that predicts the S&P 500 index will increase to 6500 points by the end of the year, primarily due to the development of corporate earnings, as reported by Odaily. The price-to-earnings ratio is anticipated to remain at approximately 21.5 times by the end of the year, with an 11% increase in earnings per share for this year and a 7% increase in the following year, according to the report.
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