On January 23, local time, the famous investment bank Goldman Sachs made a forecast for the performance of the Federal Reserve in 2024.。

Joshua Schiffrin, head of global trading at Goldman Sachs, expects the Fed to cut interest rates starting in March and four in 2024, with U.S. inflation on track to reach the central bank's 2 percent target strategy。Schiffrin correctly predicted a soft landing for the U.S. economy last year.。

Schiffrin also expects central banks in Europe and the UK to follow the Fed's lead, but he predicts the Bank of Japan may buck the trend and raise interest rates in April.。

While risk assets will generally deliver gains this year, Schiffrin warned that the first half of the year will be difficult to navigate as market bets on the timing and pace of Fed rate cuts continue to shift。He advises investors to look for opportunities in emerging markets such as Turkey and believes they can buy against the trend after China's equity benchmark hit epidemic lows。

In a note to clients, Schiffrin wrote: "The first half of 2024 will be different from the last four years, with extreme market volatility and no clear trend.。"

Bond traders have lowered their rate cut expectations due to a series of better-than-expected US economic data。Back in December, the March 2024 rate cut was considered a foregone conclusion。Now, the probability of a rate cut in March has fallen to around 40%。For the full year 2024, the market expects a total rate reduction of 135 basis points, compared to Schiffrin's forecast of 100 basis points.。

Goldman Sachs says Red Sea shipping disruptions unlikely to halt widespread downward trend in inflation。Looking ahead, once the 2% inflation target is achieved, the Fed may adjust its inflation target to 1 next year..5% to 2.Interval of 5%。

The Fed will meet next week on monetary policy issues, and the market expects the Fed to hold interest rates steady for the fourth consecutive meeting。

"I'm a big believer in the March rate cut.。"I think they recognize that there are a lot of benefits to starting early - if the economy does weaken, they may gradually accelerate the pace of rate cuts, but such a plan would reduce the likelihood that they would be significantly behind the curve," Schiffrin said.。"

Schiffrin joined Goldman in 2001 and was named a partner in 2012, a year after his soft-landing predictions proved prescient.。At the time, his forecast appeared more optimistic at a time when investors and economists were generally worried about rising inflation and a recession.。Eventually, the U.S. economy grew steadily, with the consumer price index rising from 6.4% down to 3.4%。

Last January, he also called on the Bank of Japan to "undo" its policy of curbing long-term borrowing costs, known as yield curve control.。Nine months later, with rising U.S. Treasury yields pushing up global interest rates, the Bank of Japan said it would let the benchmark interest rate "break the threshold," but still tightly control yields。

Schiffrin himself admitted that some of his other predictions for 2023 did not perform well.。He underestimated the magnitude of the Fed's rate hike and misjudged that the Bank of England was the first major central bank to cut rates。He predicted that the yen's strength against the dollar did not appear.。

Looking ahead, given the steady growth trajectory, Schiffrin expects Treasury yields to move up 20 basis points instead of down next.。

In addition, Schiffrin has a non-mainstream bet: long China。According to Schiffrin, "China's stock market is going to have a great year that will surprise everyone.。There's too much pessimism。He wrote in the report, "I recommend doing this in options.。"