(Bloomberg) -- Goldman Sachs pulled forward its forecast for Federal Reserve interest rate cuts, and is now calling for the central bank to resume reductions in September rather than December, as the inflationary effects of tariffs “look a bit smaller” than expected.
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“While it is far from clear, we think the odds of a cut in September are somewhat above 50% because we see several routes to get there—underwhelming tariff effects, larger disinflationary offsets, and either genuine labor market softness or a scare from month-to-month volatility,” wrote the bank’s economics team, led by chief economist, Jan Hatzius. They add, “we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect”
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Goldman expects three quarter-point cuts this year at the Fed’s meetings in September, October and December, and also reduced its “terminal rate forecast to 3-3.25%,” from a prior call of 3.5%-3.75%
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“If there is any insurance motive for cutting, it would be most natural to cut at consecutive meetings, as in 2019,” and Goldman analysts “do not expect a cut in July, barring much weaker-than-expected employment data this week”
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Noting a still “healthy” labor market, Goldman said “it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls”
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One-liner commentary: Goldman Sachs' revised growth forecast for a rate cut at the Federal Reserve is projected earlier to September, signaling an increasing likelihood of monetary easing amidst global economic uncertainty.
Reposing Gold’s revised timelines for Fed rate cuts brings into focus the urgent need to navigate uncertainty amidst economic volatility and shifts in monetary policy.
Goldman Sachs accelerating their forecast for a Federal Reserve rate cut to September highlights the bank' s optimism regarding upcoming monetary easing measures aimed at stimulating economic growth.
The quickening of Goldman Sachs' forecast for Fed rate cuts to September suggests growing concerns over the US economic outlook, highlighting greater urgency in monetary policy easing by central banks.
Goldman Sachs' acceleration of its forecast for a Federal Reserve interest rate cut to September highlights the growing consensus that an easing cycle may be imminent, fueled by ongoing concerns over sluggish global growth and inflationary pressures.
This move by Goldman Sachs to提前其美联储降息预期至九月， highlights an accelerating view on economic slowdown and insufficient stimulus, signaling potential policy responsiveness ahead.
fiscal prudence amplifies growth pessimism其中透露出，高盛将联邦基金利率下调的预测提前至9月。
Caption correction: Goldman Sachs Advances Fed' Rate Cut Expectations to September Prediction.
This move by Goldman Sachs to advance their prediction for a Fed rate cut highlights the growing anticipation among market analysts of an early interest-rate easing due mostly likely caused concerns over inflationary pressures and possible economic slowdown in advanced economies.
,The Goldman Sachs' revised forecast for an interest rate cut by the Federal Reserve to September suggests a growing optimism on economic conditions in contrast with recent uneven data, reflecting its earlier cautious predictions.
