Morgan Asset Management's global multi-asset strategist Sheng Nan predicts that the actual GDP growth in the United States this year will be around 2%, slightly higher than the trend and in line with the current growth rate. Inflation will gradually cool down, with the overall Consumer Price Index (CPI) expected to drop to a low point of 2% by the end of the year. This in turn will prompt the Federal Reserve to cut interest rates 2-3 times this year, likely starting from the June meeting. Sheng Nan points out that in Morgan Asset Management's diversified asset portfolio, they are increasing holdings in credit and stocks. At the same time, the bank has a neutral stance on bonds because bonds may trade within a certain range, but the commitment to cutting interest rates may limit the risk of a sharp increase in bond yields. With interest rates expected to fall this year, Morgan Asset Management is reducing cash positions and managing the negative carry of this position through targeted credit and foreign exchange trades. Differences in policy timing and growth rates around the world also create meaningful relative value opportunities, as well as greater potential for securities selection alpha through the bank's end managers. Regionally, Morgan Asset Management prefers the United States and Japan. Before the first Fed rate cut, Sheng Nan expects the price of the 10-year US Treasury bond to fluctuate between 3.75% and 4.50%. In other words, the bank maintains a neutral view as the 17 basis points of yield spread penalty is offset by a yield rise of only 25 basis points. If economic growth does not significantly weaken, the bank expects US Treasury yields to not drop significantly. Instead, the bank sees more opportunities in relative value positions in government bonds, with more active range trading. Morgan Asset Management is bullish on the United States, the euro area core and peripheral countries, Australia, Canada, and Japan, while reducing holdings of stocks. While Morgan Asset Management may see a brief spike in volatility if the stock market adjusts, they believe that cross-asset volatility will generally remain low this year, indicating that cross-asset correlations may slightly decrease. Although the bank expects stock-bond correlations to not return to negative values, any decrease in correlations will further enhance diversification opportunities for asset allocators.