Photo/East Money

In recent months, emerging market bond prices have continued to rise, reflecting the market's optimistic outlook for a soft landing in the global economy. However, in the US bond market, a "storm" seems to be brewing: on the one hand, the US Treasury is issuing trillions of dollars of bonds, while on the other hand, US bonds are being sold off and US bond yields continue to rise.

Against this backdrop, the US dollar index rose above the 103 in early trading session on Monday, August 14, while the dollar/yen also broke its previous high.

As the US bond market continues to fluctuate, Goldman Sachs has released a more optimistic forecast, becoming the first top investment bank on Wall Street to clearly call for the Federal Reserve to start cutting rates. Goldman Sachs believes that the Federal Reserve will start cutting rates before the end of June next year and will gradually cut rates every quarter from then on, eventually bringing interest rates down to the 3.00%-3.25% range.

Marc Giannoni, chief US economist at Barclays Bank, wrote in an email to NBD that "The data released last week was mainly limited to inflation and wages. Further economic activity data will be released this week, which will further boost the market's hopes for a soft landing in the economy and help to maintain the expectation that the Federal Reserve will start a rate-cutting cycle as early as March next year. We will pay attention to further details about the Federal Reserve's forecasts and look for any signs of discussion about a possible rate cut in 2024."

NBD noted that Goldman Sachs' forecast is largely in line with the current expectations of futures traders: According to the CME "Fed Watch" tool, as of press time, the futures market expects the FOMC will not raise rates this year, and expects the Federal Reserve to start cutting rates by 25 basis points at its earliest meeting on May 1 next year, and by the end of next year, the federal funds rate will be lowered to the 4.00%-4.25%