PARIS (Reuters) – Inflation will move closer to central bank targets as economic growth slows in 2024, which will trigger an easing of monetary policies and primarily benefit bonds, according to Amundi, which publishes its outlook on Thursday. investment.

The management company, which manages 1.950 billion euros in assets, forecasts growth in global gross domestic product (GDP) of 2.5% in 2024, but performances will be dispersed: developed countries will see their economies grow by 0 .7% on average, compared to 3.6% for emerging economies.

In detail, the United States would enter a “moderate” recession from the first half of 2024, before the economy stabilizes in the second half, allowing American GDP to grow by 0.6% next year, while the eurozone and the United Kingdom will perform slightly worse, with growth of 0.5% expected in 2024.

Global inflationary pressures are expected to ease, but risks remain: a “disorderly energy transition” and the emergence of a new world order could once again push prices upwards, particularly those of energy and food, warns Amundi.

The asset manager nevertheless forecasts 150 and 125 basis points of interest rate cuts respectively for the Federal Reserve and the European Central Bank in 2024, bolder projections than those of the money markets, which are betting on 88 and 86 points declines.

In this context, the slowdown in activity and price dynamics could make it possible to find a negative correlation between stocks and bonds, but the diversification of portfolios could also be supplemented by real and alternative assets, points out Amundi.

The manager believes that bonds will be the asset class of 2024 as rates have reached a likely peak, and recommends exposure to sovereign securities and the highest rated credit (“investment grade”).

However, emerging debt denominated in hard currencies as well as high short-term yield in euros will become attractive again in the second half of the year, estimates Amundi.

Risky assets will suffer if Amundi’s scenario holds true, and the group recommends focusing on quality, low-volatility stocks that regularly pay dividends at the start of 2024.

As the year progresses and rates ease, Amundi advises turning to cyclical stocks and markets, such as Europe, emerging markets, and small caps.

Artificial intelligence will remain one of the important themes of the equity markets next year, with the energy transition and health, believes Amundi.

(Written by Corentin Chappron, edited by Blandine Hénault)

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