Bank of America, Deutsch Bank predict interest rate cuts in 2024
JP Morgan Asset Management fixed income portfolio manager Kelsey Berro discusses when the Fed might start lowering interest rates on Making Money.
Bank of America and Deutsch Bank both released outlooks Monday predicting the Federal Reserve will implement interest rate cuts next year.
BofA said its global research economists expect inflation to gradually cool across the globe, allowing central banks to trim rates in the second half of 2024 and avert a global recession.
The Bank of America logo is seen outside a branch in Washington, DC.. (ALASTAIR PIKE/AFP via Getty Images / Getty Images)
Bank of America Corp.
«2023 defied almost everyone's expectations: recessions that never came, rate cuts that didn't materialize, bond markets that didn't bounce, except in short-lived, vicious spurts, and rising equities that pained most investors who remained cautiously underweight,» said Candace Browning, head of BofA Global Research.
«We expect 2024 to be the year when central banks can successfully orchestrate a soft landing, though recognize that downside risks may outnumber the upside ones.»
US CONSUMER SENTIMENT DROPS AGAIN ON INFLATION FEARS
Michael Gapen, the bank's head of U.S. economics, said he expects the Fed to make its first rate cut in June, with the central bank cutting 25 basis points per quarter.
The 2024 outlook from Deutsch Bank's economists predicted cuts will begin at the same time, but the picture they painted was a little less rosy.
The headquarters of Germany's Deutsche Bank are pictured in Frankfurt, Germany, September 21, 2020. (Reuters/Ralph Orlowski / Reuters Photos)
Deutsche Bank AG
The German bank expects the U.S. to enter a «mild recession» in the first half of 2024, leading the Fed to slash
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