Original Liu Rui, Finance Associated Press.
This week, the team of Jan Hatzius, chief economist at Goldman Sachs, released a client report titled "The Difficult Part Has Passed".
In 2023, the global economy has outperformed even their most optimistic expectations, while looking ahead to 2024, the probability of a recession is expected to be only 15%, the report said.
They believe that as the global macroeconomy returns to pre-2008 levels, a number of favourable factors are expected to support global growth and investment.
The global economy has emerged from the post-financial crisis environment.
After the 2008 financial crisis, the Federal Reserve changed the federal interest rate from 4 in the short term25% to 025% all-time low to spur economic recovery. In the past two years, after many global central banks led by the Federal Reserve and other global central banks have raised interest rates rapidly, many countries around the world have ended the era of easy money.
"2024 should reinforce the notion that the global economy has moved away from a post-financial crisis environment of low inflation, zero policy rates and negative real yields....The period since the global financial crisis has often come across as an inevitable trend of falling global yields and falling inflation – 'liquidity trap' and 'secular stagnation' have been buzzwords for the decade. ”
So far, however, the global transition to a high-interest rate market environment has not been smooth, as evidenced by the volatility, the rapid tightening of financial conditions, and the increasing number of "zombie" business failures.
The big question is whether a return to the pre-global financial crisis backdrop is a balance," the strategists said, "and the answer is more likely to be yes in the US than elsewhere, especially in Europe where sovereign debt pressures are likely to reappear." ”
The Federal Reserve briefly lowered interest rates to near zero after the financial crisis, but the return to a high-interest rate environment in the United States in the past two years may have caused problems for heavily indebted businesses and the broader business environment.
Other Wall Street** people have also warned of a wave of distressed debt and distressed balance sheets in the coming months as financial conditions tighten. Schwab estimates that U.S. debt defaults will peak between now and the first quarter of 2024.
The return on non-cash assets will be better.
Goldman Sachs expects non-cash assets such as bonds and commodities to outperform cash returns by 2024.
"The transition has been bumpy, but the good thing about this 'great flight' is that the investment environment now looks more normal than it was before the global financial crisis, and the actual expected returns now certainly look positive," Hazus said. ”
The company believes that by 2024, global inflation should continue to fall, real household income growth should grow, manufacturing activity will be **, and global central banks, led by the Federal Reserve, should be increasingly willing to cut interest rates.
We don't think the last mile of inflation will be particularly tough""First, while the supply-demand balance in the commodities sector is now largely improving, the impact of disflation is still being felt for core commodities and is likely to persist for most of 2024," Hazus said. ”
Despite their relative optimism, Goldman Sachs strategists also said they see risks in 2024 as "higher than normal."
They believe that even if the disinflationary trend continues to stabilize, the Fed and other central banks are likely to keep interest rates high for longer than expected. At the same time, there are downside risks to economic growth, and the recovery of the global manufacturing industry may be delayed.
Original title: "Goldman Sachs Optimistic Outlook for Global Markets in 2024: The Most Difficult Time Has Passed".