Goldman Sachs expects the Fed to start cutting interest rates in September and cut them three times in a row
PANews reported on July 1 that the latest forecast from Goldman Sachs' economic research team is that the Federal Reserve may start cutting interest rates as early as September this year, and cut interest rates by 25 basis points at the September, October and December meetings, lowering the terminal interest rate expectation from 3.5%-3.75% to 3%-3.25%. Goldman Sachs believes that the weaker-than-expected inflationary impact of tariffs, the weak labor market and data volatility may have contributed to this result.
Goldman Sachs analysts pointed out that if the employment data performs poorly this week, the probability of a rate cut will increase further, but no action is expected at the July meeting. In contrast, Morgan Stanley analysts believe that the Fed is less likely to cut interest rates in the near future, especially at the July meeting. Morgan Stanley expects the upcoming employment report to remain solid, and although the growth rate will slow down, it will not be enough to prompt the Fed to accelerate its actions.
In addition, Chicago Fed President Goolsbee said that the current unemployment rate and inflation level in the United States are far lower than the stagflation level in the 1970s, and tariffs or supply shocks are unlikely to trigger a similar crisis in the short term. Atlanta Fed President Bostic believes that the full impact of Trump's tariffs has not yet appeared, and predicts that the Federal Reserve may only cut interest rates once this year.
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