New York-based global investment banking and securities firm Goldman Sachs Group, Inc. forecasts U.S. inflation at below 4% in 2022 while it expects flat equities growth.
Inflation is peaking in the U.S. due to various factors including expected moderation of supply chains, interest rate hikes, and the run-off of the Federal Reserve’s balance sheet, Goldman co-head of Global Private Wealth Management Meena Lakdawala-Flynn said at the Bloomberg Wealth Summit on Thursday.
“The fiscal stimulus that was there last year isn’t going to be the same this year,” she said. “We don’t think there will be a recession this year. We do think the probability of a recession has increased in 2023.”
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The banker advised investors to explore asset classes that tend to perform well against inflationary pressures, like equities, alternative assets and real estate.
At Goldman, cryptocurrencies and non-fungible-tokens (NFTs) have entered its clients’ radar, the executive revealed.
These clients are looking at NFTs as a form of investment rather than the aesthetic lure popularized by millions of dollars worth of digital art.
NFTs burst into the mainstream in 2021, totaling US$18.5 billion in sales, a 570-fold annual increase, according to data from NFT aggregator CryptoSlam.
“It’s very hard to know which tokens are gonna be the blue chips,” Lakdawala-Flynn said.
Community access is one of the booming trends within the NFT space, particularly in the NFT avatar scene. NFT avatars, often digital portraits of animated animals or creatures, represent memberships to corresponding communities. In instances, these NFTs are golden geese that airdrop additional tradable assets to owners.
“It’s best to be prudent in terms of sizing of it, but also to look at things like community followership, and what type of access do these (NFT) tokens give you that would increase their value,” Lakdawala-Flynn said.
