The economists at the American Bank, Jan Hatzios and David Merkel, said in a note published Sunday that the rate cut will come in conjunction with the inflation rate in the United States approaching the target level of 2 percent.
According to Goldman Sachs’ expectations, the US Federal Reserve will avoid raising interest rates next month, and announce in November that inflation has reached safe limits that do not require a new rate hike.
Goldman Sachs expects that the US Federal Reserve will not raise interest rates again until next June, after which it is likely to start cutting interest rates by 25 basis points every quarter.
Since last year, the Fed has raised interest rates from around zero to a range of 5.25% and 5.50% now, in an effort to reset the economy and curb price increases to a more acceptable level.
Data last week showed that annual inflation in the United States rose in July by less than expected at 3.2 percent, and the core consumer price index – which excludes energy and food – fell to 4.7 percent on an annual basis.
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