Goldman's Kostin Sees Fed Cutting Rates Three Times

Market Clarity & Economic Outlook - Clarity on policy, including the impact of the big bill, is crucial for portfolio managers and corporate executives in making capital spending and dividend decisions [1][3] - The economy is decelerating but still growing, providing an important backdrop for investment strategies [2] - The Federal Reserve is expected to cut interest rates three times starting in September, with two more cuts anticipated next year, potentially lowering bond yields [2] - Ten-year Treasury yields are projected to be around 42%, supporting a forecast of approximately 22 times multiple for the S&P 500 [3] S&P 500 & Earnings Growth - Forward earnings growth of 7% is expected to lift the S&P 500 to 6600 by the end of this year and 6900 by mid-2026 [3] - Investors have largely moved beyond tariff discussions, focusing on the broader business environment and the potential impact of deregulation [3][4] Market Breadth & Sector Opportunities - The market rally has been narrow, with the median stock down 11% from its 52-week high [5][6] - Mid-cap stocks and the Russell 2000 are trading approximately 10% lower than their 52-week highs, presenting potential opportunities [6] - Alternative asset managers within the financial sector are identified as a category with potential for growth relative to the model [7][8]