What to expect in 2024: Forecasts for GDP, inflation and other assets

(Reuters) - The Fed finally cut its interest rate by an oversized 50 basis points (bps) in its Sept 17-18 meeting that Federal Reserve Chair Jerome Powell said was meant to show policymakers' commitment to sustaining a low unemployment rate now that inflation had eased.

In addition to approving the half-percentage-point cut, Fed policymakers projected the benchmark interest rate would fall by another half percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026, though they cautioned that the outlook that far into the future is inherently uncertain.

Following are forecasts from some major banks on economic growth, inflation, and how they expect certain asset classes to perform:

Forecasts for stocks, currencies and bonds:

S&P 500 US 10-year EUR/USD USD/JPY USD/CNY

target yield

target

Goldman Sachs 5,600 1.08 150 7.20

3.85%

Morgan Stanley 5,400(for 1 140 7.5

June 2025)

UBS Global 5,200 3.85% 1.09 148 7.25

Wealth

Management*

Wells Fargo 5,300-5,500 3.75%-4.25% 1.06-1.10 156-160

Investment

Institute

Barclays 5,600 4.25% 1.09 145 7.20

J.P. Morgan 4,200 1.13 146 7.25

3.55%

BofA Global 5,400 3.75% 1.12 151 7.38

Research

Deutsche Bank 5,750 4.60% 1.07 135

Citigroup 5,600 4.20% 1.02 135 7.25

HSBC 5,400 3.00% 1.05 145 7.10

Oppenheimer

5,900

UBS Global 5,600 4.0% 1.12 145 7.10

Research*

Evercore ISI 6,000

RBC 5,700

* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group

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U.S. INFLATION

U.S. consumer prices rose slightly in August, but underlying inflation showed some stickiness amid higher costs for housing and other services.

U.S. inflation (annual Y/Y for 2024)

Headline CPI Core PCE

Goldman Sachs 2.6% 2.6%

Morgan Stanley 2.10% 2.70%

Wells Fargo 3.0% 2.60%

Investment

Institute

Barclays 2.9% 2.6%

J.P.Morgan 2.50% 2.50%

BofA Global 3.5% 2.8%

Research

Deutsche Bank 3.10%

Citigroup 2.0% 2.7%

HSBC 3.4%

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Real GDP growth forecasts for 2024

GLOBAL U.S. CHINA EURO UK INDIA

AREA

Goldman 2.7% 2.8% 0.7% 1.1% 6.9%

Sachs

4.7%

Morgan 2.8% 1.9% 4.2% 0.5% -0.1% 6.4%

Stanley

UBS Global 3.1% 2.4% 4.9% 0.6% 0.2% 7.0%

Wealth

Management*

Barclays 2.6% 1.2% 5.0% 0.3% 1.1% 6.2%

J.P.Morgan 2.6% 4.6% 6.5%

0.7%

2.7% 1.1%

BofA Global 3.2% 2.7% 0.7% 1.1% 7.6%

Research

4.8%

Deutsche 3.2% 2.7% 4.9% 0.9% 1.2% 7.0%

Bank

Citigroup 2.4% 2.0% 0.7% 1.0% 7.3%

4.7%

HSBC 2.6% 2.3% 4.9% 0.5% 0.4% 6.3%

UBS Global 3.1% 2.5% 4.6% 0.6% 1.1% 7.0%

Research*

(Compiled by the Broker Research team in Bengaluru; Edited by Janane Venkatraman, Saumyadeb Chakrabarty, Arun Koyyur, Sriraj Kalluvila, Vijay Kishore, Maju Samuel and Tasim Zahid)