Goldman Sachs Economic Research predicts that the FED will make a series of interest rate cuts starting this March. Chief economist Jan Hatzius announced in a note that the financial institution predicts a total of five interest rate cuts throughout 2024.
This forecast is more conservative compared to money markets, which are pricing in a 166 basis point cut for 2024. That amounts to more than six rate cuts of 25 basis points each, according to Refinitiv data.
Hatzius also said, “The European Central Bank will follow in April and the Bank of England in May, and our views on both central banks are somewhat dovish relative to market pricing.”
Hatzius added that although global core inflation increased modestly on a one-month basis in December, the three-month annualized rate slowed further to 2.0%.
The FED left interest rates constant in the decisions it made after the meetings held in December. While some analysis companies argue that the first interest rate cut will come in the summer, others expect a definite cut in March.
*This is not investment advice.