Goldman Sachs were long-time proponents of a March 2024 Federal Open Market Committee (FOMC) cut to the Fed Funds rate.
They've now changed that call to May given the communications from the Committee and jpw on Wednesday.
- Powell gave a strong signal that a March funds rate cut ‘is probably not the most likely case.’
- Given this comment — as well as our expectation of solid growth in Q1 and a temporary firming in sequential inflation in January — we have pushed back our forecast of the first cut from March to May.”
- we continue to expect 5 cuts in 2024 and 3 more in 2025
- We now expect the FOMC to deliver four consecutive cuts at the May, June, July, and September meetings before slowing to a quarterly pace and adding a final cut this year in December.
- because we expect core PCE inflation to fall at least a couple of tenths below the FOMC’s 2.4% median projection”
Earlier responses along similar lines:
- JP Morgan forecast the first FOMC rate cut in June, but are wavering on perhaps May
- Fitch responds to the FOMC and Powell - "we don’t see rate cuts until June or July"
But, none are as good as this one!
