Top forecaster sees US outperforming forecasts in 2024, risks remain
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The world's top economic forecaster sees US GDP growth of 2.5% in 2024, slightly above consensus expectations. He believes the economy will hold up better than anticipated.
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Biggest risks he's watching are geopolitical tensions, particularly in the Middle East. An exogenous shock could derail the economy.
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Expects the Fed to pivot and cut rates in May, not March. Need more deterioration in labor market for March cut.
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Sees ECB lagging Fed in rate cuts, likely not until June. Provides opportunity to long EUR/USD to benefit from rate differential.
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Geopolitical shock is main risk to short EUR/USD trade. Absent shock, EUR can outperform USD in 2024.