The global investment banking giant Goldman Sachs Group Inc. has raised concerns about a potential market shock that could disrupt the current ‘Goldilocks’ economy.
Goldilocks Economy Holds, But Growth And Rate Risks Loom
The term ‘Goldilocks’ economy refers to a balanced economic scenario, not too hot to cause inflation or too cold to slow growth. The S&P 500 index is currently near its all-time high, and investors are in high spirits.
However, Goldman Sachs’ chief global equity strategist, Mueller-Glissmann, and his team have identified three potential ‘bears’ that could disrupt this equilibrium. A growth shock, which could result from increased unemployment or disappointments in AI. Secondly, a rate shock, in case the Federal Reserve doesn’t implement further rate cuts. Lastly, a new dollar bear, leading to a 10% devaluation of the dollar, which could deter foreign investors from the U.S. market, Fortune reported.
“There is a risk that …