Goldman Sachs: If the Fed Adopts a More Dovish Stance, the Dollar May Weaken Across the Board

According to a report by Jinse Finance, Goldman Sachs' latest research indicates that if the Federal Reserve adopts a more dovish stance, four market scenarios may emerge: a purely dovish policy shock, declining growth expectations, coexistence of dovish policy and slowing growth, and dovish policy alongside rising growth. The analysis shows that falling U.S. Treasury yields, strengthening of the euro, yen, and Swiss franc, and rising gold prices are the most consistent trends across these scenarios, while the performance of U.S. stocks is highly dependent on growth prospects. The "dovish + rising growth" scenario is most favorable for risk assets, but if summer employment and inflation data deteriorate, growth concerns may resurface. The market has already begun to price in the Fed's easing policy, but future trends will be highly dependent on economic data.