Fed Interest Rate Cuts Expected by Goldman Sachs in Second Quarter of 2024
Goldman Sachs has projected that the Federal Reserve will commence interest rate reductions in the second quarter of the upcoming year.
The bank’s economists, including Jan Hatzius and David Mericle, anticipate that Fed officials will abstain from raising rates during their imminent meeting. The economists stated that their forecast is driven by the desire to normalize the funds rate as inflation approaches the target, rather than due to an impending recession. They’ve estimated potential cuts of 25 basis points per quarter but acknowledge uncertainty about the pace.
The economists believe the funds rate will eventually stabilize between 3% and 3.25%. This prediction aligns with similar forecasts from other financial institutions, such as Bank of America. The Goldman economists also expect that the Fed will decide against further rate hikes during its forthcoming Federal Open Market Committee (FOMC) meeting. They believe the Fed’s aggressive anti-inflation efforts have elevated the benchmark interest rate to its highest level since 2001, and they note the possibility of additional tightening measures if deemed necessary.
Clever Robot News Desk 16th August 2023
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