Kamakshya Trivedi 3.4 4 ideas

Trivedi states, "We do have a stronger growth outlook... despite that stronger growth outlook we expect inflation to remain benign." He cites waning tariff impacts and softer wage growth. This combination (Growth + Disinflation) is the definition of a "Goldilocks" scenario. Markets often fear strong growth leads to rate hikes, but GS argues inflation is structuraly contained (AI/China export deflation), allowing the Fed to cut rates twice in H2. LONG US Equities as the macro backdrop supports valuation expansion. Unexpected inflation spikes from supply chain shocks.

GS views the Dollar as "overvalued" based on their metrics, supported previously by "exceptional market performance" in the US which is now normalizing. As US exceptionalism fades relative to the rest of the world and the Fed cuts rates (2 cuts forecasted), the yield differential support for the USD erodes. SHORT USD (expecting moderate depreciation). US inflation re-accelerates, forcing the Fed to hold rates higher for longer.

Trivedi notes the recent Yen rally went "too far too fast" and expects the Bank of Japan to hike rates only moderately (next hike likely July, not March). The market over-extrapolated the BoJ's hawkishness. With a slow hiking cycle and a still-strong US economy, the yield gap remains wide enough to push USD/JPY back up toward 155. SHORT JPY (Targeting 155 USD/JPY). BoJ surprises with an aggressive hike in March.