Gold and U.S. 10-Year Real Rates The price of gold typically has an inverse relationship with U.S. real interest rates, as investors tend to shift their investments between gold and interest-bearing assets based on the opportunity cost of holding gold. Image: BofA Global Research
Interest Rates – Central Bank Policy Rate Hikes vs. Cuts Emerging market central banks typically take the lead in initiating monetary tightening and easing cycles. In 2024, their approach has shifted away from aggressive easing. Image: BofA Global Investment Strategy
Interest Rates Since 3000BC The end of the era of low interest rates could potentially have far-reaching implications for both consumers and businesses. Image: BofA Global Investment Strategy
When Will the Fed First Cut Interest Rates? Will the Fed lower interest rates in the second quarter of 2024? This decision holds significant implications for financial markets and the economy. Image: BofA Global Fund Manager Survey
Interest Rates – Expectations for the Fed’s Policy Rate Path Nomura still expects 25 bp rate cuts in July and December 2024, as well as four additional 25 bp rate cuts in 2025. Image: Nomura
Fed Rates Cut Since the Fed’s last hike in July 2023, their ongoing 10-month pause is exceeding the average duration. Extended periods of “higher for longer” policies often lead to unfavorable outcomes. Image: Morgan Stanley Wealth Management
FMS Investors – Net % Expecting Lower Long-Term Rates Only 38% of FMS investors expect bond yields to decrease, while the majority anticipate stable or potentially higher bond yields. Image: BofA Global Fund Manager Survey
Interest Rates – U.S. Federal Funds Rate Expectations BofA expects a 3.5-3.75% terminal rate in this cutting cycle, up 50bp from their previous forecast. This suggests a need to tighten monetary policy to control inflation and maintain economic balance. Image: BofA Global Research
Central Banks Policy Rates Are global negative interest rates unlikely to be revisited soon, as many policymakers have concluded that they have not worked as intended? Image: Deutsche Bank
Interest Rates – Fed Funds Rate Goldman Sachs now expects the Fed to implement three rate cuts in 2024, down from its earlier projection of four rate cuts, in response to elevated inflation data and evolving economic conditions. Image: Goldman Sachs Global Investment Research