Note: The following is a redacted version of the original report published November 14, 2024 [25 pgs].

14 November 2024 | 11:04AM EST

Global Economics Analyst

Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs

n We expect the second Trump administration to bring higher China and auto Jan Hatzius
+1(212)902-0394 | [email protected]
tariffs, much lower immigration, some fresh tax cuts, and regulatory easing. If Goldman Sachs & Co. LLC

so, the US economy should grow 2.5% in 2025, outperforming consensus Dominic Wilson
+1(212)902-5924 |
expectations and other DM economies for the third year in a row. The biggest [email protected]
Goldman Sachs & Co. LLC
risk is a large across-the-board tariff, which would likely hit growth hard.
Joseph Briggs
+1(212)902-2163 |
[email protected]
n We have cut our Euro area GDP forecast to a below-consensus 0.8%, reflecting Goldman Sachs & Co. LLC
ongoing structural headwinds and a hit from trade policy uncertainty. We have Vickie Chang
+1(212)902-6915 | [email protected]
also shaved our 2025 China GDP forecast to 4.5% because of higher US tariffs Goldman Sachs & Co. LLC

that are only partially offset by easier macro policies. Risks in both Europe and Giovanni Pierdomenico
+44(20)7051-6807 |
China are on the downside if tariffs increase beyond our baseline. [email protected]
Goldman Sachs International

n US core PCE inflation should slow to 2.4% by late 2025, higher than our prior Sarah Dong
+1(212)357-9741 | [email protected]
forecast of 2.0% but still benign. Our forecast would rise to around 3% with an Goldman Sachs & Co. LLC

across-the-board tariff of 10%. In the Euro area, we expect core inflation to slow Megan Peters
+44(20)7051-2058 |
to 2% by late 2025 and are less concerned about upside risks even with a [email protected]
Goldman Sachs International
broader trade war. Lowflation risks have abated in Japan.

n We expect significant further rate cuts over the next year. The Fed is likely to cut
to 3.25-3.5%, with sequential moves through Q1 and a slowdown thereafter.
We have shaved our ECB forecast to 1.75% on the back of our growth
downgrade and also see significant room for policy easing in EMs. However, we
expect the Bank of Japan to lift its policy rate to 0.75% by yearend.

n Our baseline forecast implies a benign risk backdrop and US outperformance.

We expect modest positive returns across equities, commodities, and DM
bonds, alongside gradual USD appreciation. But markets have already moved a
long way in a risk-positive direction, and it will be important to limit exposure to
the tails around our baseline.
n Moving toward a broader trade war would reinforce USD upside but put
pressure on global equities. Unusually high US equity valuations not only
dampen long-term expected returns but also amplify the potential reaction to any
economic weakness. By contrast, positive tailwinds could emerge if policies
shift to be even more corporate friendly, oil prices fall more sharply on spare
capacity, or inflation and fiscal fears prove overdone.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC
certification and other important disclosures, see the Disclosure Appendix, or go to
www.gs.com/research/hedge.html.
Goldman Sachs Global Economics Analyst

Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs

The economic data this year have reinforced our long-standing optimism about
post-pandemic normalization. Global GDP growth is tracking at 2.7% in 2024, similar to
the 2023 pace and slightly above our estimate of potential, with US growth again
leading the way among DMs.1 Global labor markets have rebalanced, with both
unemployment and broader measures such as our jobs-workers gap back to
pre-pandemic levels. Inflation has continued to trend down and is now within striking
distance of central bank targets. And most central banks are well into the process of
cutting interest rates back to more normal levels.

Trumponomics 2.0...
How will US economic policy change in the second Trump administration? Exhibit 1
summarizes our expectations for four areas of focus: trade, immigration, fiscal, and
regulation.

Exhibit 1: We Expect New Tariffs on China, Reduced Net Immigration, Modest New Tax Cuts, and a More Relaxed Regulatory Stance in the
Second Trump Administration
Post-Election Policy Changes
Scenario Trade Immigration Fiscal Regulation

• Full extension of expiring tax cuts in early 2025

• Tariffs on China: New tariffs up to 60%,
• Expand SALT deduction ($30bn/yr)
averaging to a 20pp increase in the effective tariff • Antitrust: Enforcement eases somewhat, though
rate and mostly reflecting new tariffs on list 1-3 major pending tech sector cases proceed
• Exclude extra 50% overtime from income tax
items from the 2018-2019 trade war
($20bn/yr)

• Exclude tips from income tax ($10bn/yr)

• Tariffs on the EU: 22.5pp increase in the • Energy: Easier approval of energy projects,
effective tariff rate on autos expanding LNG exports, and reversing
• Net immigration slows to 750k/year in response • Lower corporate tax for domestic manufacturers
Base Case restrictions on greenhouse gas emission
to increased funding and tighter enforcement to 15% ($25bn/yr)
• Tariffs on Mexico: 97.5pp increase in tariffs on
• Reinstate more generous corporate incentives,
imports of Chinese-made electric vehicles
(e.g., 100% bonus depreciation, R&D expensing,
• Financial: Near-term easing of regulatory burden
and interest deductibility; $60bn/yr)
on consumer finance companies, medium-term
• Overall: 3.4pp increase in the effective tariff rate easing of capital and liquidity requirements
• Allow enhanced ACA subsidies to expire
for US imports
(-$20bn/yr)

• Limitations on green subsidies (-$15bn/yr)

• More broad-based tariffs: A 10pp surcharge on • Selective deportation of immigrants with criminal
all imports (40% chance), or a tariff on all auto records (up to 1.2mn individuals)
imports
Risk Cases
• Forced deportations along the lines of
• Revoking Permanent Normal Trade Relations "Eisenhower model" that removes up to 2.1mn
with China (requires legislative action) individuals

Source: Goldman Sachs Global Investment Research

Exhibit 2 shows the effects on US GDP growth under our base case across all policies,
while Exhibit 3 shows the effects for our risk case in which President-elect Trump
imposes an across-the-board tariff of 10%. If this happens, the most likely timing is
2025H2. This means that there will likely be a period of uncertainty that may tighten
financial conditions and weigh on growth. In our base case, the uncertainty resolves
and financial conditions ease anew. In our tariff risk case, the uncertainty continues to
build and financial conditions tighten further.

The effects from the new policies on US GDP are small and largely offsetting under our
baseline outlook. The new administration is likely to announce the China and auto tariffs

1
We aggregate global GDP growth using market exchange rates. If we used purchasing power parity rates,
as the IMF does, our estimates would be about 0.5pp higher.

14 November 2024 2
Goldman Sachs Global Economics Analyst

relatively soon after the January 20 inauguration, which could also fuel uncertainty about
broader tariff measures among businesses and market participants. These tariffs would
result in a modest hit to real disposable personal income via higher consumer prices,
and the broader uncertainty of how much further the trade war might escalate is likely
to weigh on business investment. The result is a net drag averaging 0.2pp in 2025.
Assuming that the trade war does not escalate further, we expect the positive impulses
from tax cuts, a friendlier regulatory environment, and improved “animal spirits” among
businesses to dominate in 2026, with a net boost to growth averaging 0.3pp.

Exhibit 2: We Expect a Small Hit to Growth in 2025 and a Moderate Boost to Growth in 2026 Under Our
Baseline Policy Assumptions
Percentage Impact on US Year-over-Year Real Percentage
points GDP Growth, GS Baseline points
1.5 Consumption & Govt. Spending Fiscal Effect 1.5
Investment, FCI & Animal Spirits
Tariff Effect
1.0 1.0
Immigration Effect
Total
0.5 0.5

0.0 0.0

-0.5 -0.5

-1.0 -1.0

Apr-27
Apr-25

Jul-25

Oct-25

Apr-26

Jul-26

Oct-26

Jul-27

Oct-27
Jan-26
Jan-25

Jan-27
Source: Goldman Sachs Global Investment Research

In our tariff risk case, by contrast, the modest negative impulse from the China and auto
tariffs gives way to a bigger negative impulse from the across-the-board tariff, both
because the hit to real income increases and because trade policy uncertainty builds
further. In 2026, this results in a net drag on growth averaging 1.0pp and peaking at
1.2pp, although the peak drag declines to 0.8pp if we assume that the increased tariff
revenue is fully recycled into tax cuts.

14 November 2024 3
Goldman Sachs Global Economics Analyst

Exhibit 3: We See a Bigger Hit to Growth Under an Added 10% Across-the-Board Tariff
Impact of Post-Election Policy Changes on US Year-over-Year Real GDP Growth
Percentage GS Baseline + 10% Across-the-Board Tariff Percentage Percentage GS Baseline + 10% Across-the-Board Tariff, Percentage
points points points With Tax Cuts points
2.0 Consumption & Govt. Spending Fiscal Effect 2.0 2.0 Consumption & Govt. Spending Fiscal Effect 2.0
Investment, FCI & Animal Spirits Investment, FCI & Animal Spirits
1.5 Tariff Effect 1.5 1.5 Tariff Effect 1.5
Immigration Effect Immigration Effect
1.0 Total 1.0 1.0 Total 1.0

0.5 0.5 0.5 0.5

0.0 0.0 0.0 0.0

-0.5 -0.5 -0.5 -0.5

-1.0 -1.0 -1.0 -1.0

-1.5 -1.5 -1.5 -1.5

-2.0 -2.0 -2.0 -2.0

Oct-25

Oct-26

Oct-27

Oct-25

Oct-26

Oct-27
Apr-25

Apr-26

Apr-27

Apr-25

Apr-26

Apr-27
Jul-25

Jul-26

Jul-27

Jul-25

Jul-26

Jul-27
Jan-25

Jan-26

Jan-27

Jan-25

Jan-26

Jan-27
Source: Goldman Sachs Global Investment Research

...And Its Effects on Europe and China

The growth hit from US trade policy is greater elsewhere. One key finding in our
research on tariffs is the important impact of trade policy uncertainty (TPU) on growth
in the Euro area. The left chart in Exhibit 4 summarizes research suggesting that a rise
in TPU to the peak levels of the 2018-19 trade war would subtract 0.3% from GDP in
the US but as much as 0.9% in the Euro area. Moreover, the right chart shows that
trade policy uncertainty (measured via mentions in corporate earnings reports) has
already risen much more in the Euro area than in the US. We therefore cut our 2025
Euro area growth forecast on the back of the US election results by 0.5pp on a Q4/Q4
basis and would likely cut it further if the US imposes an across-the-board tariff.

Exhibit 4: Historical Evidence and Recent Trends Suggest Trade Policy Uncertainty Will Disproportionately Weigh on Euro Area GDP

Source: LSEG Data & Analytics, GS Data Works , Goldman Sachs Global Investment Research

14 November 2024 4
Goldman Sachs Global Economics Analyst

The impact is more direct in China, which will almost certainly face tariff increases that
we expect will reach up to 60pp and average 20pp across all exports to the US. As
shown in Exhibit 5, we estimate that the US tariff increase in our baseline scenario will
subtract almost 0.7pp from China growth in 2025. Assuming that Chinese policymakers
provide macro stimulus and some of the growth hit is offset by RMB depreciation, we
have cut our 2025 growth forecast more modestly, by 0.2pp on net to 4.5%. However,
we would likely make larger downgrades if the trade war were to escalate further, either
with an across-the-board tariff or more aggressive China-specific measures such as an
end to permanent normal trade relations (PNTR) between the US and China.

Exhibit 5: The US Tariff Increase Would Subtract 0.7pp From Chinese Growth in 2025
Percentage Effect of the Trade War on China Quarter-over-Quarter Percentage
points Annualized Real GDP Growth, GS Baseline points
0.0 0.0

-0.2 -0.2

-0.4 -0.4

Net Trade
-0.6 Trade Policy Uncertainty -0.6

FCI
-0.8 Real Income -0.8

Total
-1.0 -1.0
1 2 3 4 1 2 3 4 1 2 3 4
2024 2025 2026

Source: Goldman Sachs Global Investment Research

We also expect a drag from US trade policy in other economies, with larger drags in
more trade-exposed economies and potential boosts in certain EMs that are well
positioned to gain export share if trade shifts away from China (e.g., Mexico and
Vietnam). Overall, we estimate changes to US trade policy will subtract 0.4% from
global GDP, although increased policy support should dampen this hit. The impact could
be 2-3 times larger if the US imposes a 10% across-the-board tariff.

Modest Price Boosts from Tariffs

Higher tariffs will also raise US inflation, at least in the short term. The experience of
the first Trump administration shows that tariffs are largely passed on to consumer
prices. This is visible in the fact that prices in tariffed PCE categories rose by almost
exactly the tariff amount, while prices in non-tariffed categories remained on their prior
trend (Exhibit 6).

14 November 2024 5
Goldman Sachs Global Economics Analyst

Exhibit 6: Tariffs Boosted Consumer Prices During the Last Trade War

Source: Haver Analytics, Goldman Sachs Global Investment Research

If tariffs are confined to China and autos from Europe and Mexico, this analysis implies
that the US inflation impact will be a relatively modest 0.3-0.4pp, as shown in Exhibit 7.
If we add a broader 10% across-the-board tariff, the impact rises to almost 1.2pp.
Barring significant second-round effects via expectations or wages, however, tariff
effects are price level effects, so the inflation impact subsides in 2026-2027. Outside
the US, inflation effects should be minor even under our assumption of full retaliation.

Exhibit 7: We Expect a Modest 0.3-0.4pp Boost to US Core PCE Inflation Under Our Baseline Tariff Assumptions, With a Larger Impact Under
a Broader 10% Across-the-Board Tariff

Source: Goldman Sachs Global Investment Research

Another Solid Year for Global Growth

The upshot is that, barring a broader trade war, policy changes in the second Trump
administration are unlikely to change the broad contours of our global economic views.

14 November 2024 6
Goldman Sachs Global Economics Analyst

As shown in Exhibit 8, we expect global growth to average 2.7% in 2025, nearly the
same pace as in 2024 and slightly above consensus. Relative to consensus, we are
optimistic in the US and pessimistic in the Euro area, with other major economies in
between.

Exhibit 8: Solid Global Growth, with US Outperformance Relative to Consensus

Real GDP Growth Annual Average Q4/Q4
2024.. 2025.. 2026 2025 Potential
Percent Change yoy
GS Consensus GS Consensus GS Consensus GS GS
US 2.8 2.7 2.5 1.9 2.3 2.0 2.4 2.1
Euro Area 0.8 0.7 0.8 1.2 1.0 1.4 0.6 1.0
Germany -0.1 -0.1 0.3 0.8 0.8 1.3 0.2 0.8
France 1.1 1.1 0.7 1.0 1.0 1.2 0.8 1.0
Italy 0.5 0.8 0.6 1.0 0.9 1.0 0.6 0.8
Spain 3.0 2.8 2.0 2.2 1.5 1.8 1.7 1.7
Japan -0.2 0.0 1.2 1.2 1.1 1.0 1.0 0.7
UK 0.9 1.0 1.3 1.3 1.3 1.5 1.2 1.4
Canada 1.1 1.1 1.9 1.8 2.0 2.2 2.0 2.1
Australia 1.2 1.2 1.8 2.0 2.5 2.5 2.0 2.6
China 4.9 4.8 4.5 4.5 4.0 4.1 3.9 4.1
India 6.7 7.0 6.3 6.7 6.7 6.5 6.0 6.2
Brazil 3.1 3.0 2.0 2.0 2.3 2.0 3.0 2.1
Russia 3.5 3.5 1.2 1.6 2.1 1.4 2.3 2.3
World 2.7 2.7 2.7 2.6 2.6 2.6 2.5 2.5
Note: All forecasts calculated on calendar year basis. IMF forecasts used for India 2026 consensus when quarters not available in Bloomberg.
Potential refers to GS estimates of potential growth for 2025. Global growth aggregates use market FX country weights and China NSA year-over-
year growth.

Source: Bloomberg, Goldman Sachs Global Investment Research

A key reason for optimism on global growth is the dramatic inflation decline over the
past two years. This directly supports real income because price inflation has fallen far
more quickly than wage inflation, which is still elevated as workers make up for the real
wage losses they suffered in the early post-pandemic years. The resulting strength in
real hourly wages has helped real disposable household income grow 3-4% over the
past year across the major advanced economies, a pace that is likely to moderate in
Europe but should remain strong in the US and Canada in 2025 (Exhibit 9).

14 November 2024 7
Goldman Sachs Global Economics Analyst

Exhibit 9: Real Income Growth Should Remain Firm in 2025 Due to Strong Real Wage Growth

Source: Haver Analytics, Goldman Sachs Global Investment Research

Just as importantly, the inflation decline also indirectly supports demand by allowing
central banks to normalize monetary policy and thereby ease financial conditions. Under
the simplifying assumption that our financial conditions indices remain at their latest
spot level, we estimate a positive impulse to growth of about 0.2pp across the G10
economies over the next four quarters (Exhibit 10). If financial conditions ease further
on the back of solid global growth and central bank policy rate cuts, the positive impulse
would be greater.

Exhibit 10: Rate Cuts and Financial Conditions Easing Should Support Growth in 2025
Index GS DM Financial Conditions Index Index Percentage Impulse of GS FCI on Quarter-over-Quarter Percentage
101.0 101.0 points Annualized Real DM GDP Growth points
0.50 0.50
100.5 Tightening 100.5
0.25 0.25

0.00 0.00
100.0 100.0
-0.25 -0.25
99.5 99.5
-0.50 -0.50

99.0 99.0 -0.75 -0.75

-1.00 -1.00
98.5 98.5
-1.25 -1.25

98.0 98.0 -1.50 -1.50

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3

97.5 97.5 2022 2023 2024 2025

2018 2019 2020 2021 2022 2023 2024 2025 Note: The standard impulses assume that the FCI stays flat following 13th Nov. We
Note: We consider a GDP-weighted average (market FX) of the US, the Euro area, consider a GDP-weighted average (market FX) of the US, the Euro area, Japan,
Japan, the UK, Canada, Australia, Sweden, Norway, Switzerland, and New Zealand. the UK, Canada, Australia, Sweden, Norway, Switzerland, and New Zealand.

Source: Goldman Sachs Global Investment Research

None of this explains why real GDP is growing so much faster in the US than in other
advanced economies. The answer, instead, is found on the supply side. Following the
recent revisions to the US national accounts, labor productivity in the US has grown at a
1.7% annualized rate since late 2019, a clear acceleration from the pre-pandemic trend
of 1.3%. By contrast, labor productivity in the Euro area has grown at a 0.2% annualized

14 November 2024 8
Goldman Sachs Global Economics Analyst

rate over the same period, a clear deceleration from an already-mediocre 0.7% before
the pandemic. Other advanced economies have shown similarly lackluster trends
(Exhibit 11). We expect US productivity growth to remain significantly stronger than
elsewhere, and this is a key reason why we expect US GDP growth to continue to
outperform.

Exhibit 11: Productivity Growth Has Outperformed in the US, Underperformed Elsewhere

Source: Haver Analytics, Goldman Sachs Global Investment Research

Remember Bumpy Disinflation?

We have revised up our core PCE inflation forecast for late 2025 to 2.4%, from 2.0%
before the election. Moreover, the risks are tilted to the high side because of the risk of
a broader trade war. An across-the-board tariff of 10% on top of the China and auto
tariffs would likely raise core inflation to 3.1% in early 2026 (Exhibit 12).

14 November 2024 9
Goldman Sachs Global Economics Analyst

Exhibit 12: China (and Auto) Tariffs Would Modestly Delay Disinflation, But a Broad 10% Tariff Would Cause
Reacceleration

Source: Goldman Sachs Global Investment Research

Even our revised US inflation forecast is quite benign, at least in the baseline. This is
partly just an extrapolation of recent trends. Although core inflation is still modestly
above target, at least on a year-on-year basis, both headline inflation and 3-month
annualized core inflation are close to (and in several cases below) target across most
major DM economies. Australia is a high-side outlier, but it’s worth remembering that
the RBA pursues a higher 2-3% inflation target vs. 2% for most other central banks
(Exhibit 13).

Exhibit 13: Inflation Has Already Returned Close to Target Across DMs

Source: Haver Analytics, Goldman Sachs Global Investment Research

There are also strong fundamental reasons to expect core inflation progress to continue.
Aside from a direct tariff boost in the US, core goods inflation should remain low due to

14 November 2024 10
Goldman Sachs Global Economics Analyst

continued growth in Chinese exports and inventory normalization in Europe.

Meanwhile, shelter inflation should continue to cool, particularly in the US where market
rent indicators have looked benign for nearly two years but the official measures are
only gradually catching up with reality (Exhibit 14).

Exhibit 14: Core Goods Inflation Has Eased and Should Remain Subdued; Shelter Inflation Should Continue to Trend Down

Source: Haver Analytics, Goldman Sachs Global Investment Research

Most importantly, services ex energy and housing—which make up well over half of
the core indices—are particularly sensitive to labor costs. It is therefore reassuring that
a broad set of labor market tightness measures across advanced economies have
returned to pre-pandemic levels. For now, wage growth remains somewhat above the
pace compatible with target-consistent inflation assuming productivity grows in line
with the long-term trend. However, much of the remaining gap reflects lags in the
catch-up of negotiated wages to the earlier price surge, and we expect steady further
wage disinflation in 2025 (Exhibit 15).

14 November 2024 11
Goldman Sachs Global Economics Analyst

Exhibit 15: Core Services Inflation and Wage Growth Progress Should Continue With Labor Markets Mostly Rebalanced

Source: Haver Analytics, Goldman Sachs Global Investment Research

Thus, both the recent numbers and the fundamentals point to further across-the-board
disinflation, as shown in Exhibit 16. While we expect the Euro area and Canada to
return fully to 2% by late 2025, the US, the UK, and Australia are likely to cluster around
2½%, with additional declines in 2026 likely. The inflation surge of 2021-2022 is now
firmly in the rearview mirror.

Exhibit 16: We Expect Disinflation to Continue

Source: Haver Analytics, Goldman Sachs Global Investment Research

Further Gradual Rate Cuts Ahead

Against this backdrop, we do not expect the US election outcome to derail the policy
normalization process that is currently underway, and see most major central banks
easing significantly further through 2025.

14 November 2024 12
Goldman Sachs Global Economics Analyst

We forecast that the Fed will cut to 3.25-3.5% with sequential moves through Q1 and a
slowdown thereafter. If anything, the threat of a near-term growth drag from tariffs and
the Fed leadership’s continued preference for frontloaded policy normalization have
strengthened our confidence in sequential cuts through early next year. While the pace
after Q1 and ultimate stopping point—which may depend on the Fed’s willingness to
respond preemptively to future inflation boosts from President-elect Trump’s policies—
admittedly remain uncertain, our baseline and probability-weighted Fed forecasts are
meaningfully more dovish than current market pricing (Exhibit 17).

Exhibit 17: Our Fed Scenarios Suggest Risks Around Our Fed Forecast Are Skewed Dovish Relative to Market Pricing
sPercent
ri Fed Funds Rate Scenario Analysis Percent Percent Fed Funds Rate Percent
7 7 7 7
Higher Inflation / Tariffs / Higher Terminal Rate (25%) GS Baseline Path
6 GS Baseline (50%) 6 6 GS Probability-Weighted Average Path 6
Recession Cuts (25%)* Market Pricing

5 5 5 5

4 4 4 4

3 3 3 3

2 2 2 2

1 1 1 1

0 0 0 0
Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Jan-26 Jul-26 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Jan-26 Jul-26
*This is the probability of a recession happening at any point over the horizon shown above. Our 12-month recession probability is 15%.

Source: Goldman Sachs Global Investment Research

Exhibit 18 shows our policy forecasts for other DMs. In the Euro area, we continue to
expect sequential ECB cuts and have lowered our terminal forecast to 1.75% on the
back of our growth downgrade. In the UK, we are raising our BoE forecast to reflect a
better growth outlook following a more expansionary Autumn Budget, and now expect
quarterly cuts back to 3.75% by end-2025 and a terminal rate of 3.25% in 2026Q2. We
continue to see risks of faster UK cuts if near-term growth disappoints, however, and
our terminal rate forecast remains well below market pricing.

We generally expect more aggressive cuts in smaller DM central banks where inflation
progress is even more convincing and unemployment rates have risen more
meaningfully. The BoC, RBNZ, and Riksbank have already delivered 50bp cuts, and we
anticipate the BoC, RBNZ, and SNB will each cut by 50bp at their next meetings. The
exception among smaller DMs is Australia, where we continue to expect quarterly rate
cuts starting in February. But even here we see risks as skewed dovish given that
growth remains weak and inflation indicators aren’t that different from other DMs where
cutting cycles are well underway.

14 November 2024 13
Goldman Sachs Global Economics Analyst

Exhibit 18: We Expect Rate Cuts to Continue, With Larger Steps in Smaller DMs

Source: Goldman Sachs Global Investment Research

We see significant room for monetary easing in EMs as well given that policy rates
remain far above neutral (Exhibit 19). This is especially true in Latin America and
CEEMEA, but we also expect rate cuts to broaden in Asia over the next few quarters.
The main exception to our forecast for EM rate cuts is Brazil, where we anticipate an
overheated economy will prompt another 150bp in rate hikes through 2025Q1 (to
12.75%) followed by 125bp in rate cuts (to 11.50%) by end-2025. Our EM policy rate
forecasts are quite dovish relative to market pricing.

Exhibit 19: High Real Rates Leave Room for Significant EM Easing

Source: Haver Analytics, Bloomberg, Goldman Sachs Global Investment Research

The main outlier to our forecast for steady rate cuts is Japan. A pickup in inflation and
wage growth after three decades of anemic price pressures allowed the BoJ to exit
negative interest rate policy in March and hike again in July. We are increasingly

14 November 2024 14
Goldman Sachs Global Economics Analyst

confident lowflation risks are behind us and rate hikes will continue. Wage growth
should remain firm (we forecast a 3-3.5% base pay increase in spring 2025’s shunto
wage negotiations) and is increasingly correlated with price increases, suggesting that a
virtuous wage-price spiral that will help anchor inflation expectations has emerged. In
addition, demand looks more robust and policy space has increased relative to the
recent past, suggesting less downside inflation risk in the event that activity weakens.

We expect that new core CPI (ex fresh food and energy) will increase by 2.1%
year-over-year in 2025 and 2.0% in 2026 on an annual average basis, a target-consistent
pace that supports our forecast for 25bp semi-annual hikes to 0.75% by end-2025 and
a terminal rate of 1.5% in 2027 (Exhibit 20).

Exhibit 20: Fading Risks of Lowflation Increase Our Confidence that the BoJ Will Gradually Normalize Policy

Source: Haver Analytics, Goldman Sachs Global Investment Research

14 November 2024 15
Goldman Sachs Global Economics Analyst

Better US Growth but Better Market Pricing

Our baseline economic forecast for steady growth, cooling inflation, and further
non-recessionary rate cuts, as well as policies that could be helpful to corporate
earnings, represents a friendly risk asset backdrop for 2025. This view, alongside our
economic forecast for continued US outperformance is reflected by our baseline 2025
market forecasts.

A key challenge, however, is that markets have already moved a long way to price this
kind of outlook. Our US growth view is once again well above the consensus forecast.
But both ahead of and since the election, investors have sharply upgraded the US
growth views embedded in assets, pushing US equities and the USD to fresh highs and
widening the gap between US and European bond yields (Exhibit 21). We think our
baseline forecasts still justify higher equity prices and further USD outperformance, but
that judgment is more finely balanced than it was. As US markets take more credit for
favorable policies up front, the risk of ultimate disappointment will rise.

Exhibit 21: Market Pricing Has Shifted Towards Our More Positive US Growth View
Percent Change in Market Pricing Since: Basis points
20 100
September FOMC Election
81bp
15 68bp 75
11.9%

10 50
6.2%
4.4% 4.8% 25bp
5 3.5% 18bp 25
2.1% 11bp

0 0
-3bp
-2.5% -2.7% Left axis Right axis
-5 -25
USD TWI S&P 500 Eurostoxx US Cyclicals US 2y US 10y Germany
50 vs. Yield Yield 10y Yield
Defensives
*GS
*GSUSD
USDtrade-weighted
Trade Weightedindex.
Index.

Source: Bloomberg, Goldman Sachs Global Investment Research

Because the market has moved much closer to our central case, our forecasts for many
key assets are not far from current levels. The modest positive returns that we expect
for many assets come more from the yield or carry than a big shift in spot prices. This
means that the investing backdrop is likely to depend on the distribution around that
base case even more than usual. The US election outcome widens the distribution of
policy shifts. The core challenge continues to involve maintaining some exposure to a
robust US economic outlook, while protecting against the key tail risks.

Tail Risks Now a Critical Focus

The potential for a broader trade war looms large among those tails. The narrowly
focused tariffs that feature in our baseline scenario are likely to be less disruptive both
to the US economic picture and to China’s trade and markets, given the experience
since the first round of tariffs in 2018-2019 and China’s reduced trade exposure to the
US. As in 2019, the actual announcement of tariffs could still move markets, including

14 November 2024 16
Goldman Sachs Global Economics Analyst

China’s currency. But expectations of action on this front are high and markets are
relatively well-prepared for these outcomes.

We think the impact of a broader across-the-board tariff is underpriced, particularly for

its potential impact on Europe and some non-China EM economies (the incremental
pressure on China should be relatively smaller given that tariffs are already expected).
We think a firmer shift in this direction could lead to meaningful further USD upside
(Exhibit 22) and add to downward pressure on non-US equities and bond yields. Our
baseline forecast is already one in which European GDP growth is below consensus and
European yields and EUR/USD decline further. A broader trade war would add to those
pressures. The impact on US markets is less certain, but we think across-the-board
tariffs and the threat of retaliatory action could weigh on US equities too and might
ultimately push US yields lower, as it did in 2019.

Exhibit 22: Markets Do Not Seem to Have Priced the Risk of Broader Tariffs Yet

Source: Bloomberg, Goldman Sachs Global Investment Research

In other areas, we think the risks are more balanced. The US election has clearly
increased the possibility of additional fiscal expansion and fresh focus on the
sustainability of the US public debt profile. But our central scenario of only modest
fiscal stimulus makes us more skeptical that we will see a sharp increase in fiscal risk
premium in US Treasury markets. Even in the UK, where the market has worried more
in the light of the recent budget, we would look to fade those risks in both rates and
currency markets. Given our robust US growth views, the bigger upside risk may
simply be an earlier stopping point to the Fed easing cycle, which could prompt markets
to judge that the neutral rate is higher than we are assuming. It is only in Japan where
our baseline policy path lies well above the market and where we expect bonds to
underperform. Near-term inflation risks are also two-sided, after a sharp move higher in
market pricing of US inflation over the next couple of years. Short-dated US inflation
swaps are priced well above our US inflation forecast, so we think this is one area of the
market that already reflects a meaningful chance of broader trade risks.

Oil market tails lie in both directions too. In our baseline forecast, we expect Brent

14 November 2024 17
Goldman Sachs Global Economics Analyst

prices to stay in a $70-$85/bbl range. But the risks of breaking that range are growing.
In the short term, the new administration raises the risks to Iranian supply, which have
already been elevated due to Israel-Iran conflict. That upside tail risk adds to the value
of commodity longs in a portfolio context. We think the medium-term risks, however,
skew to the downside of our forecast range. That is both because ample supply is still
being kept off the market which could begin to find its way back into the system in
2025, but also because broader-based tariff action could hurt global demand. In those
scenarios, oil prices might again become a tailwind for disinflation trends.

High Valuations Fatten the Downside

High valuations reinforce the importance of focusing on these tail risks. US equity
valuations are now at levels that have not been exceeded in the post-war era except in
the late 1990s. Some of the recent uplift comes on expectations that upcoming policies
will boost after-tax earnings. But even adjusting for this, US equity valuations look
historically high (Exhibit 23). Credit spreads too are near their historical lows, and even
those segments of the market that were pricing more elevated risk premium have now
compressed. As our Portfolio Strategy team recently showed, the long-term expected
returns from equities now look low as a result (they estimate 3% nominal returns over
the next decade when accounting for the risks from unusually high market
concentration). As a result, prospective returns on government bonds and credit on that
longer horizon look relatively better, reflecting historically low levels of the Equity Risk
Premium and Equity-Credit Premium.

Exhibit 23: Equity Earnings “Yield” Is Low vs. History

Source: Haver Analytics, Goldman Sachs Global Investment Research

Rich valuations are not an obstacle to further equity gains if the cyclical tailwinds are
powerful, as we have seen already in 2024. For US equities, we find that the price for
higher valuations is often paid disproportionately when the cycle deteriorates (Exhibit
24). Our baseline forecast means that challenge will most likely be avoided in 2025. But
if growth risks do rise more sharply than we anticipate, equity downside could be faster
and deeper than normal. The sharp drops in risk assets, and spikes in volatility, in early

14 November 2024 18
Goldman Sachs Global Economics Analyst

August may be a harbinger of that kind of sensitivity. That fatter downside tail also
highlights the importance of keeping an eye on another kind of “valuation challenge”—
the point at which our more optimistic macro forecasts seem fully reflected in assets.
As in 2024, we are likely to push harder on our asset views when the market is clearly in
doubt about elements of our macro picture.

Exhibit 24: Richer Valuations Make Equity Markets More Vulnerable to Cyclical Deterioration

Source: Goldman Sachs Global Investment Research

Maintain Exposure, Limit Tails

Although markets have already moved to reflect key elements of our macro view, we
still forecast modest positive returns across the key asset classes (Exhibit 25). US
growth resilience should still support outperformance of US equities and
underperformance of US bonds, alongside some further expected upside to the US
dollar. Given subdued valuations, EM equities are likely to outperform fixed income.
And while EM hard currency fixed income should prove more defensive than local
currency in a strong USD environment, local currency assets have more scope to
perform if the tails are avoided. Commodity markets should continue to benefit from a
positive roll return, with lower contribution from price shifts.

14 November 2024 19
Goldman Sachs Global Economics Analyst

Exhibit 25: We Forecast Modest Positive Returns Across Key Asset Classes

Source: Datastream, Bloomberg, Goldman Sachs Global Investment Research

The key challenge is to maintain exposure to these themes, while limiting the major tail
risks. Diversification can help address some of these challenges. The ongoing decline in
inflation across a range of economies in 2024 has allowed central banks, including the
Fed, to focus more on the risks to growth. We see risks from both growth and
inflation/policy shocks, particularly in the next few months as the Trump policy agenda
takes shape. But although the market may still oscillate between these different risks,
we think the correlation of bonds and equities is more likely to drift lower than higher
over the medium term. This means that US Treasuries, and even more so Bunds and
Gilts, can still play an important diversifying role in portfolios. TIPS too look appealing
since real yields have room to fall if growth disappoints, but inflation protection remains
valuable. Broadening US equity exposure towards mid-cap equities or a more
equal-weighted allocation may mitigate concentration and valuation risks. Long USD
positions should also provide protection against both US rate upside and broadening
tariff risks, reinforcing the case for US investors to keep hedging their overseas bonds
(and equity) exposures.

As in 2024, we think there are strong arguments for using options to provide protection
against macro tails. Equity volatility has fallen post-election and this makes it easier to
gain upside exposure to US assets through call options again. Deeper downside
exposure (including in European equities which are vulnerable to some key risks) also
looks more attractively priced. Long USD optionality remains appealing (especially
against EUR, CAD, SGD and KRW), while upside in gold and oil can still protect against
some key tails. Some assets could also benefit if US policy risks fail to materialize. In
2017, the first year of the first Trump administration, EM stocks and currencies ultimately
outperformed. A more restrained US fiscal impulse, or a more narrowly focused trade
agenda, could again provide relief to parts of the EM universe where those risks have
been most clearly reflected. Some exposure to that kind of upside may be useful too.
The wider range of potential market outcomes means that any declines in volatility

14 November 2024 20
Goldman Sachs Global Economics Analyst

across assets in 2025 are likely to be opportunities to add hedges.

14 November 2024 21
Goldman Sachs Global Economics Analyst

Disclosure Appendix
Reg AC
We, Jan Hatzius, Dominic Wilson, Joseph Briggs, Vickie Chang, Giovanni Pierdomenico, Sarah Dong and Megan Peters, hereby certify that all of the
views expressed in this report accurately reflect our personal views, which have not been influenced by considerations of the firm’s business or client
relationships.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.

Disclosures
Regulatory disclosures
Disclosures required by United States laws and regulations
See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or
co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed
public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs trades or may trade as a
principal in debt securities (or in related derivatives) of issuers discussed in this report.
The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,
professionals reporting to analysts and members of their households from owning securities of any company in the analyst’s area of coverage.
Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst
as officer or director: Goldman Sachs policy generally prohibits its analysts, persons reporting to analysts or members of their households from
serving as an officer, director or advisor of any company in the analyst’s area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be
associated persons of Goldman Sachs & Co. LLC and therefore may not be subject to FINRA Rule 2241 or FINRA Rule 2242 restrictions on
communications with subject company, public appearances and trading securities held by the analysts.

Additional disclosures required under the laws and regulations of jurisdictions other than the United States
The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and
regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in the
Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any access to
it, is intended only for “wholesale clients” within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman Sachs. In
producing research reports, members of Global Investment Research of Goldman Sachs Australia may attend site visits and other meetings hosted by
the companies and other entities which are the subject of its research reports. In some instances the costs of such site visits or meetings may be met
in part or in whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating
to the site visit or meeting. To the extent that the contents of this document contains any financial product advice, it is general advice only and has
been prepared by Goldman Sachs without taking into account a client’s objectives, financial situation or needs. A client should, before acting on any
such advice, consider the appropriateness of the advice having regard to the client’s own objectives, financial situation and needs. A copy of certain
Goldman Sachs Australia and New Zealand disclosure of interests and a copy of Goldman Sachs’ Australian Sell-Side Research Independence Policy
Statement are available at: https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Brazil: Disclosure information in relation to
CVM Resolution n. 20 is available at https://www.gs.com/worldwide/brazil/area/gir/index.html. Where applicable, the Brazil-registered analyst primarily
responsible for the content of this research report, as defined in Article 20 of CVM Resolution n. 20, is the first author named at the beginning of this
report, unless indicated otherwise at the end of the text. Canada: This information is being provided to you for information purposes only and is not,
and under no circumstances should be construed as, an advertisement, offering or solicitation by Goldman Sachs & Co. LLC for purchasers of
securities in Canada to trade in any Canadian security. Goldman Sachs & Co. LLC is not registered as a dealer in any jurisdiction in Canada under
applicable Canadian securities laws and generally is not permitted to trade in Canadian securities and may be prohibited from selling certain securities
and products in certain jurisdictions in Canada. If you wish to trade in any Canadian securities or other products in Canada please contact Goldman
Sachs Canada Inc., an affiliate of The Goldman Sachs Group Inc., or another registered Canadian dealer. Hong Kong: Further information on the
securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information
on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited, Research
Analyst - SEBI Registration Number INH000001493, 951-A, Rational House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India, Corporate
Identity Number U74140MH2006FTC160634, Phone +91 22 6616 9000, Fax +91 22 6616 9001. Goldman Sachs may beneficially own 1% or more of
the securities (as such term is defined in clause 2 (h) the Indian Securities Contracts (Regulation) Act, 1956) of the subject company or companies
referred to in this research report. Investment in securities market are subject to market risks. Read all the related documents carefully before
investing. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of
returns to investors. Goldman Sachs (India) Securities Private Limited Investor Grievance E-mail: [email protected]. Compliance Officer: Anil
Rajput |Tel: + 91 22 6616 9000 | Email: [email protected]. Japan: See below. Korea: This research, and any access to it, is intended only for
“professional investors” within the meaning of the Financial Services and Capital Markets Act, unless otherwise agreed by Goldman Sachs. Further
information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New
Zealand: Goldman Sachs New Zealand Limited and its affiliates are neither “registered banks” nor “deposit takers” (as defined in the Reserve Bank of
New Zealand Act 1989) in New Zealand. This research, and any access to it, is intended for “wholesale clients” (as defined in the Financial Advisers Act
2008) unless otherwise agreed by Goldman Sachs. A copy of certain Goldman Sachs Australia and New Zealand disclosure of interests is available at:
https://www.goldmansachs.com/disclosures/australia-new-zealand/index.html. Russia: Research reports distributed in the Russian Federation are not
advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not
provide appraisal within the meaning of the Russian legislation on appraisal activity. Research reports do not constitute a personalized investment
recommendation as defined in Russian laws and regulations, are not addressed to a specific client, and are prepared without analyzing the financial
circumstances, investment profiles or risk profiles of clients. Goldman Sachs assumes no responsibility for any investment decisions that may be taken
by a client or any other person based on this research report. Singapore: Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), which is
regulated by the Monetary Authority of Singapore, accepts legal responsibility for this research, and should be contacted with respect to any matters
arising from, or in connection with, this research. Taiwan: This material is for reference only and must not be reprinted without permission. Investors
should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who
would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this
research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have
been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are
available from Goldman Sachs International on request.
European Union and United Kingdom: Disclosure information in relation to Article 6 (2) of the European Commission Delegated Regulation (EU)

14 November 2024 22
Goldman Sachs Global Economics Analyst

(2016/958) supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (including as that Delegated Regulation is
implemented into United Kingdom domestic law and regulation following the United Kingdom’s departure from the European Union and the European
Economic Area) with regard to regulatory technical standards for the technical arrangements for objective presentation of investment
recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of
conflicts of interest is available at https://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of
Interest in Connection with Investment Research.
Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho
69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan Type II Financial Instruments Firms Association, The
Investment Trusts Association, Japan, and Japan Investment Advisers Association. Sales and purchase of equities are subject to commission
pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock
exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.

Global product; distributing entities

Goldman Sachs Global Investment Research produces and distributes research products for clients of Goldman Sachs on a global basis. Analysts based
in Goldman Sachs offices around the world produce research on industries and companies, and research on macroeconomics, currencies, commodities
and portfolio strategy. This research is disseminated in Australia by Goldman Sachs Australia Pty Ltd (ABN 21 006 797 897); in Brazil by Goldman Sachs
do Brasil Corretora de Títulos e Valores Mobiliários S.A.; Public Communication Channel Goldman Sachs Brazil: 0800 727 5764 and / or
[email protected]. Available Weekdays (except holidays), from 9am to 6pm. Canal de Comunicação com o Público Goldman Sachs Brasil:
0800 727 5764 e/ou [email protected]. Horário de funcionamento: segunda-feira à sexta-feira (exceto feriados), das 9h às 18h; in Canada
by Goldman Sachs & Co. LLC; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by
Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs New
Zealand Limited; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the
United States of America by Goldman Sachs & Co. LLC. Goldman Sachs International has approved this research in connection with its distribution in
the United Kingdom.
Goldman Sachs International (“GSI”), authorised by the Prudential Regulation Authority (“PRA”) and regulated by the Financial Conduct Authority
(“FCA”) and the PRA, has approved this research in connection with its distribution in the United Kingdom.
European Economic Area: GSI, authorised by the PRA and regulated by the FCA and the PRA, disseminates research in the following jurisdictions
within the European Economic Area: the Grand Duchy of Luxembourg, Italy, the Kingdom of Belgium, the Kingdom of Denmark, the Kingdom of
Norway, the Republic of Finland and the Republic of Ireland; GSI - Succursale de Paris (Paris branch) which is authorised by the French Autorité de
contrôle prudentiel et de resolution (“ACPR”) and regulated by the Autorité de contrôle prudentiel et de resolution and the Autorité des marches
financiers (“AMF”) disseminates research in France; GSI - Sucursal en España (Madrid branch) authorized in Spain by the Comisión Nacional del
Mercado de Valores disseminates research in the Kingdom of Spain; GSI - Sweden Bankfilial (Stockholm branch) is authorized by the SFSA as a “third
country branch” in accordance with Chapter 4, Section 4 of the Swedish Securities and Market Act (Sw. lag (2007:528) om värdepappersmarknaden)
disseminates research in the Kingdom of Sweden; Goldman Sachs Bank Europe SE (“GSBE”) is a credit institution incorporated in Germany and, within
the Single Supervisory Mechanism, subject to direct prudential supervision by the European Central Bank and in other respects supervised by German
Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and Deutsche Bundesbank and disseminates research
in the Federal Republic of Germany and those jurisdictions within the European Economic Area where GSI is not authorised to disseminate research
and additionally, GSBE, Copenhagen Branch filial af GSBE, Tyskland, supervised by the Danish Financial Authority disseminates research in the Kingdom
of Denmark; GSBE - Sucursal en España (Madrid branch) subject (to a limited extent) to local supervision by the Bank of Spain disseminates research in
the Kingdom of Spain; GSBE - Succursale Italia (Milan branch) to the relevant applicable extent, subject to local supervision by the Bank of Italy (Banca
d’Italia) and the Italian Companies and Exchange Commission (Commissione Nazionale per le Società e la Borsa “Consob”) disseminates research in
Italy; GSBE - Succursale de Paris (Paris branch), supervised by the AMF and by the ACPR disseminates research in France; and GSBE - Sweden
Bankfilial (Stockholm branch), to a limited extent, subject to local supervision by the Swedish Financial Supervisory Authority (Finansinpektionen)
disseminates research in the Kingdom of Sweden.

General disclosures
This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we
consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and
forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as
appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority
of reports are published at irregular intervals as appropriate in the analyst’s judgment.
Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment
banking and other business relationships with a substantial percentage of the companies covered by Global Investment Research. Goldman Sachs &
Co. LLC, the United States broker dealer, is a member of SIPC (https://www.sipc.org).
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and principal
trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, principal trading desks and
investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.
We and our affiliates, officers, directors, and employees will from time to time have long or short positions in, act as principal in, and buy or sell, the
securities or derivatives, if any, referred to in this research, unless otherwise prohibited by regulation or Goldman Sachs policy.
The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sachs, do not
necessarily reflect those of Global Investment Research and are not an official view of Goldman Sachs.
Any third party referenced herein, including any salespeople, traders and other professionals or members of their household, may have positions in the
products mentioned that are inconsistent with the views expressed by analysts named in this report.
This research is focused on investment themes across markets, industries and sectors. It does not attempt to distinguish between the prospects or
performance of, or provide analysis of, individual companies within any industry or sector we describe.
Any trading recommendation in this research relating to an equity or credit security or securities within an industry or sector is reflective of the
investment theme being discussed and is not a recommendation of any such security in isolation.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be
illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of
individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if
appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them
may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

14 November 2024 23
Goldman Sachs Global Economics Analyst

Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.
Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.
Investors should review current options and futures disclosure documents which are available from Goldman Sachs sales representatives or at
https://www.theocc.com/about/publications/character-risks.jsp and
https://www.fiadocumentation.org/fia/regulatory-disclosures_1/fia-uniform-futures-and-options-on-futures-risk-disclosures-booklet-pdf-version-2018.
Transaction costs may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation
will be supplied upon request.
Differing Levels of Service provided by Global Investment Research: The level and types of services provided to you by Goldman Sachs Global
Investment Research may vary as compared to that provided to internal and other external clients of GS, depending on various factors including your
individual preferences as to the frequency and manner of receiving communication, your risk profile and investment focus and perspective (e.g.,
marketwide, sector specific, long term, short term), the size and scope of your overall client relationship with GS, and legal and regulatory constraints.
As an example, certain clients may request to receive notifications when research on specific securities is published, and certain clients may request
that specific data underlying analysts’ fundamental analysis available on our internal client websites be delivered to them electronically through data
feeds or otherwise. No change to an analyst’s fundamental research views (e.g., ratings, price targets, or material changes to earnings estimates for
equity securities), will be communicated to any client prior to inclusion of such information in a research report broadly disseminated through electronic
publication to our internal client websites or through other means, as necessary, to all clients who are entitled to receive such reports.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all
research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our
research by third party aggregators. For research, models or other data related to one or more securities, markets or asset classes (including related
services) that may be available to you, please contact your GS representative or go to https://research.gs.com.
Disclosure information is also available at https://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY
10282.
© 2024 Goldman Sachs.
You are permitted to store, display, analyze, modify, reformat, and print the information made available to you via this service only for your own use.
You may not resell or reverse engineer this information to calculate or develop any index for disclosure and/or marketing or create any other derivative
works or commercial product(s), data or offering(s) without the express written consent of Goldman Sachs. You are not permitted to publish, transmit,
or otherwise reproduce this information, in whole or in part, in any format to any third party without the express written consent of Goldman Sachs.
This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or
finetune a machine learning or artificial intelligence system, or to provide or reproduce this information, in whole or in part, as a prompt or input to any
such system.

14 November 2024 24