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Yahoo Finance’s exclusive coverage from the World Economic Forum in Davos, Switzerland continues, as Yahoo Finance sits down with top leaders to discuss their economic outlook for 2024. Some of the highlights are below.
Bank of America CEO Brian Moynihan (00:00:03)
Bank of America CEO Brian Moynihan (BAC) explains why he thinks there will be a soft landing. “What is a soft landing, where GDP growth is never negative on a quarterly basis… So now [our team’s] The basic view is that GDP growth in the first three quarters will fall to 1% per annum, 4 plus from the third quarter growth rate. It’s a soft landing. It didn’t go negative, but it got closer to zero…that’s the forecast…and that’s largely because of consumers,” Moynihan said.
Ann Walsh, CIO and Managing Partner, Guggenheim Partners Investment Management (00:00:43)
Anne Walsh, CIO and managing partner at Guggenheim Partners Investment Management, discusses why she believes we are in for a “soft recession.” “Historically, we have seen more than 300 days of inverted yields as a precursor to a recession. And our view is that a mild recession is on the way. …It’s just a good old-fashioned business slowdown,” Walsh explains. “We’re a little bit more concerned about the economy slowing down further than we think it’s going to be a soft landing.”
Walsh added that he believes “we’re pretty much a two-economy economy right now.” “There are large companies and large market participants, and they all seem to be doing pretty well. They’re going into this economic slowdown cycle with tailwinds…but small businesses in the U.S. It’s a different story,” Walsh explains. Especially for small and medium-sized banks, commercial and industrial loans will become a barrier to refinancing and will have to be refinanced. ”
Stifel Financial CEO Ron Kruszewski (00:02:02)
Ron Kruszewski (SF), CEO of Stifel Financial, discusses his predictions for a Federal Reserve rate cut in 2024. “The Fed will probably cut rates less than the market thinks, and probably not as quickly as the market thinks,” Kruszewski said. “The definition of a soft landing would be for the Fed to be able to cut rates while the economy is strong. But the reason I went a little short of those expectations is because the Fed was really concerned about inflation…and the Fed didn’t have much interest until March. “I don’t think we’re saying, ‘Oh, problem solved.'” Kruszewski added, “Hard landings start with soft landings.”
Kenneth Rogoff, Professor of Economics, Harvard University (00:02:47)
Kenneth Rogoff, Maurits C. Boas Professor of International Economics at Harvard University, explains why “the Fed has no idea what it wants.” The Fed “wants to find a path for interest rates so that inflation stabilizes. They don’t know what that is, they’re going to feel it,” Rogoff said.
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