Bloomberg (gated) report on a Sunday note from economists at Goldman Sachs.
The GS analysts expect the Federal Open Market Committee (FOMC) will begin its rate cut cycle by the end of June next year with a 25bp cut. Further rate cuts will follow from there at a gradual pace, likely to be once per quarter. GS argues that the Fed will want to cut once inflation is closer to target so as to normalize the Fed Funds rate from its restrictive level.
More:
- "Normalization is not a particularly urgent motivation for cutting. and for that reason we also see a significant risk that the FOMC will instead hold steady" (at the September meeting)
- GS expect the FOMC will say at the November 2023 meeting that trend in core inflation has slowed enough to make a final hike unnecessary.
Federal Reserve Chair Powell
