HomeFinancial MarketsGoldman Sachs Expects Fed Rate Cut By July 2024

Goldman Sachs Expects Fed Rate Cut By July 2024

Goldman Sachs adjusted its forecast for when it expects the Federal Reserve to cut its interest rates. Previously expecting the Fed to cut rates in the fourth quarter of 2024, Goldman Sachs now expects the first rate cut to come in July.

“The change does not reflect any major shift in our thinking but rather that the rough thresholds for cutting that we have given previously are now reached earlier,” the Goldman Sachs team wrote in a note explaining their adjusted forecast. The firm’s economists now expect inflation to fall sooner next year than initially projected.

Inflation as measured by the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures index, is expected to hit 2.5% by the second quarter of next year. Originally, Goldman Sachs expected this figure to be realized by the fourth quarter of 2024. While still above the Fed’s 2% target, inflation has continued to show signs of movement toward this figure, with core PCE at 3.5% in October.

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