BlackRock Investment: Expects the Federal Reserve to adopt a more accommodative stance in 2026 and maintains a neutral outlook on risk assets

Zhitong
2025.05.09 07:30
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PineBridge Investments expects the U.S. economy to slow down in 2026, with prices stabilizing after inflation. At that time, the Federal Reserve may shift to easing, with expectations of three rate cuts to 3.75% within the next 12 months. The attractiveness of U.S. dollar assets will weaken, leading funds to shift towards global diversification. The euro to U.S. dollar exchange rate forecast has been raised to 1.1500. Maintain a neutral stance on risk assets, favoring sectors with long-term structural advantages, particularly in emerging market banking and Asian dollar bonds. The price of gold as a safe-haven asset continues to rise

According to the Zhitong Finance APP, Baillie Gifford has released its latest views on coping with current market uncertainties and provided insights on cross-asset allocation. Despite Trump's public pressure for interest rate cuts, the Federal Reserve remains steadfast in its strategy. It is expected that the U.S. economy will slow down by 2026, and after a one-time surge in inflation, price levels will stabilize, at which point the Federal Reserve's stance is likely to shift towards easing. Therefore, it is anticipated that the Federal Reserve will cut interest rates three times in the next 12 months, bringing the policy rate down to 3.75%, while the yield on U.S. 10-year Treasury bonds is expected to be 4.00%.

The attractiveness of U.S. dollar assets continues to weaken, as the dollar depreciates and the halo of American exceptionalism fades, prompting funds to shift towards global diversification. The euro is expected to benefit from various favorable policies in Europe, as well as Germany's increased growth potential starting in 2026. As a result, the euro to dollar exchange rate forecast has been raised from 1.0750 to 1.1500, while the dollar to yen forecast has been lowered from 150.00 to 140.00 to reflect the overall weakening trend of the dollar.

Due to the current market environment's uncertainties, a neutral stance on risk assets is maintained, with a preference for areas with long-term structural advantages. Certain European and emerging market bonds, as well as mispriced industrial stocks, all have long-term investment potential. In particular, the overall risk resistance of the emerging market banking sector is strong; although interest rate cuts may weaken banks' profitability, the local economic outlook is sufficient to support loan quality and liquidity. Furthermore, recent market volatility indicates that Asian dollar bonds may become an alternative to U.S. and European fixed income, especially during bear markets.

Due to deteriorating economic relations and rising geopolitical risks, gold continues to be a safe-haven asset, with prices consistently rising. If U.S.-China relations do not improve, China may increase monetary easing efforts beyond current stimulus measures, leading to global M2 money supply growth outpacing nominal GDP growth, which will be the real driver of gold's continued rise

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