Goldman Sachs Asset Management Predicts 2% Growth in U.S. Economy for Second Half of 2024
By Suzanne McGee
In a recent online media gathering, Goldman Sachs Asset Management executives shared their forecast for the U.S. economy in the latter half of 2024. They anticipate a slower growth rate of around 2%, attributing this to declining earnings growth and political uncertainties.
Lindsay Rosner, head of multi-sector investing at GSAM, described the economic outlook as a "soft landing," indicating a gradual slowdown in growth. She also mentioned the possibility of interest rate cuts by the Federal Reserve starting in September, with potential reductions of 25 basis points per quarter.
Rosner highlighted the fixed income market as a beneficiary of falling interest rates, pointing out opportunities in high yield bonds and structured credit. On the equity side, Alexis Deladerriere, global equity portfolio manager at GSAM, emphasized the need to diversify away from AI-focused stocks, which have been driving market returns.
As earnings growth slows and geopolitical concerns rise, Deladerriere expects U.S. stocks to remain relatively flat in the second half of the year. He believes that a broader range of companies, including small caps, may outperform the market. Additionally, GSAM finds Indian and Japanese equities appealing due to their exposure to trends like AI and climate change solutions.
In summary, Goldman Sachs Asset Management's outlook for the U.S. economy in the latter half of 2024 points to modest growth, potential interest rate cuts, and opportunities in both fixed income and equity markets. Investors are advised to diversify their portfolios and consider international equities for potential outperformance.