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Goldman Sachs no longer expects US interest rate cut in May

Published 02/22/2024, 11:01 PM
Updated 02/22/2024, 11:06 PM
© Reuters. FILE PHOTO: The Federal Reserve building in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts/File Photo

SINGAPORE (Reuters) - Goldman Sachs' analysts no longer expect a U.S. interest rate cut in May and see four 25 basis point cuts this year, as policymakers' rhetoric suggests they are in no rush.

Federal Reserve Governor Christopher Waller said on Thursday he needed to see a few more months of inflation data to check the economy was on track toward price stability.

"Because there are only two rounds of inflation data and a little over two months until the May (Fed) meeting, his comments suggest to us that a rate cut as early as May, which we had previously expected, is unlikely," Goldman Sachs analysts said in a note. They now forecast an extra cut next year instead, with an unchanged terminal rate forecast of 3.25-3.5%.

Latest comments

Why would would anyone think the Fed, that raised rates so aggressively in less than two full years would turn around and cut them before there was concrete evidence that inflation was under control? My guess is we see one rate cut just before the presidential election.
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