Goldman Sachs: "The difficult part is behind us," the economic and investment environment is returning to pre-2008 levels.

Zhitong App has learned that Goldman Sachs strategists have stated that there is a 15% possibility of an economic recession in the next year, and they expect some favorable factors to support global growth and investment as the macro economy recovers to pre-2008 levels.

Led by Jan Hatzius, the Goldman Sachs strategists stated this week that the global economy's performance is even exceeding optimistic expectations by 2023.

Hatzius said, "By 2024, the idea that the global economy has escaped the post-global financial crisis environment of low inflation, zero policy rates, and negative real yields should be solidified." "During this period since the global financial crisis, it often felt like a trend of declining global yields and inflation levels - 'liquidity trap' and 'secular stagnation' were the buzzwords of the past decade."

Policymakers have ended the era of loose monetary policy, and so far, the transition to higher interest rates has not been smooth, as evidenced by the sharp fluctuations in the stock market, the rapid tightening of the financial environment, and the increasing number of "zombie" companies going bankrupt.

"The biggest question is whether the interest rate environment before the global financial crisis is a balance," the strategists said. "The answer in the United States is more likely to be yes compared to elsewhere, especially in Europe where sovereign debt pressures may reappear."

The Federal Reserve lowered interest rates to near-zero levels after the financial crisis, but returning to a high-interest-rate environment could pose problems for heavily indebted companies and the broader business environment.

Other Wall Street forecasters also warn that as the financial environment tightens, there will be a wave of bad debts and bad balance sheets in the coming months. J.P. Morgan estimates that defaults will peak from now until the first quarter of 2024.

Favorable factors in the market

Goldman Sachs expects that by 2024, the returns on interest rates, credit, stocks, and commodities will surpass cash.

Hatzius said, "The transition process has been bumpy, but the benefit of this 'great escape' is that the current investment environment looks more normal than at any time before the global financial crisis, and the expected actual returns now appear to be positive." He refers to the transition from the era of loose monetary policy.

Goldman Sachs believes that by 2024, the inflation rate should continue to decline, real household income growth should increase, manufacturing activity will rebound, and central banks, led by the Federal Reserve, should become increasingly willing to cut interest rates.

"We don't think the last mile of disinflation will be particularly difficult," Hatzius said. "First, although the improvement in the supply-demand balance in the commodity industry (measured, for example, by lagged deliveries from suppliers) is now largely complete, the impact of core commodity deflation is still evident and may persist for much of 2024." Despite their relative optimism, Goldman Sachs strategists have stated that they believe the risks in 2024 are "above normal levels."

Even if inflation remains stable, the Federal Reserve and other central banks may still maintain high interest rates for a longer period than expected.

The bank also noted that there are downside risks to economic growth. The recovery of global manufacturing may be delayed, especially if high interest rates prompt businesses to normalize sales levels below inventory levels in 2019.