Economic expectations for 2024: Davos Highlights

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Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland continues as Yahoo Finance sat down with top leaders to discuss the economic outlook for 2024. Here are some of the highlights.

Bank of America CEO Brian Moynihan (00:00:03)

Bank of America CEO Brian Moynihan (BAC) explains why he thinks we will see a soft landing. “What a soft landing is, you don’t go negative in GDP growth on a quarterly basis… So now [our team’s] basic view is we drop from the growth rate in the third quarter 4 plus, down to 1 percent annualized GDP growth for the first three quarters. That is a soft landing. It didn’t go negative, but it landed and got near zero… That’s the prediction… And that’s largely due to the consumer,” Moynihan says.

Guggenheim Partners Investment Management CIO & Managing Partner Anne Walsh (00:00:43)

Guggenheim Partners Investment Management CIO and Managing Partner Anne Walsh discusses why she believes we will see “a mild recession.” “We’ve seen the yield curve being inverted for 300 plus days is a precursor to recession historically. And our view is, is that we are going to see a mild recession… just a good old-fashioned slowdown in business,” Walsh explains. “We’re just a little bit more concerned that the economy will slow down more than that soft landing view.”

Walsh adds that she thinks of “the economy as almost two economies now.” “There’s the big companies, the big market participants, they all seem to be doing pretty well. They’re coming into this slowdown cycle with a tailwind... However, the small and midsize businesses in the U.S.,” Walsh explains, “that’s a different story. They’re going to be having to refinance as a refinancing wall in coming with commercial industrial loans, particularly in small and midsize banks.”

Stifel Financial CEO Ron Kruszewski (00:02:02)

Stifel Financial CEO Ron Kruszewski (SF) discusses expectations for rate cuts from the Federal Reserve in 2024. “The Fed will cut less than the market thinks and not as soon as the market thinks,” Kruszewski notes. “The definition of a soft landing would be that the Fed could cut while the economy’s strong. But the reason I tapped those expectations down a little bit, is that the Fed really was concerned about inflation… And I don’t see the Fed just saying ‘oh we’ve solved the problem’ by March.” Kruszewski adds that “a hard landing starts with a soft landing.”

Harvard University Professor of Economics Kenneth Rogoff (00:02:47)

Kenneth Rogoff, Maurits C. Boas Chair of International Economics at Harvard University, explains why “the Fed just doesn’t know what it’s looking for.” The Federal Reserve “wants to find a path of interests rates so that inflation’s stable. They don’t know what it is and they’re going to feel it out,” Rogoff says.