Goldman Sachs The Markets “US exceptionalism all over again”
21 snips
Dec 13, 2024 
Anshul Sehgal, Head of US Interest Rate Products Trading at Goldman Sachs, dives into the recent inflation data and its implications for the Federal Reserve’s interest rate strategy. He discusses how new administration policies mirror fiscal strategies from the early 1980s and may lead to a credit-driven economic revival. Sehgal also explores current market conditions and predicts how these factors will influence the dollar and the S&P 500, highlighting emerging investment opportunities for savvy investors.
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CPI Print and Fed Decision
- The recent CPI print suggests a decline in rent, a key inflation driver.
- This, combined with increased labor market slack, allows the Fed to cut rates.
Expected Pause in Rate Cuts
- The Fed is expected to pause rate cuts in January due to seasonality and the new administration’s policies.
- Market expectations align with this prediction of a pause after a 100 basis point cut.
Impact of New Administration's Policies
- The new administration's policies, similar to Reagan's, could lead to a strong dollar and US exceptionalism.
- This involves loose fiscal policy, tight monetary policy, and trade frictions, mirroring the 1980s.