In particular, the chief economist of Goldman Sachs pointed out that the Fed's thinking has undergone two profound ......
After analyzing the Fed's recent rhetoric and the minutes of its January meeting, Goldman Sachs once again "capitulated" and postponed their ** on when the Fed will start cutting interest rates until June.
The U.S. investment bank had expected the Fed to cut interest rates in March, which was earlier postponed to MayGoldman Sachs currently expects the Fed to cut interest rates four times this year, cutting rates in June, July, September and December. The bank expects the Fed to cut interest rates five times.
On Thursday, three Fed seniors highlightedThe Fed will still cut interest rates this year, just not as quickly as the market expects。As recently as mid-January, investors and some economists were still betting that the Fed would start cutting interest rates at its March 19-20 meeting.
Goldman Sachs analysts said that with only two rounds of inflation data out and more than two months to go before the May Fed meeting, Waller's comments suggestedIt is unlikely that the Fed will cut rates as early as May as previously expected.
Jan Hatzius, chief economist at Goldman Sachs, and others wrote in a Feb. 22 noteGoldman Sachs expects the Fed to cut interest rates four more times next yearPreviously, they cut interest rates three times, and eventually the federal interest rate will remain at 325%-3.5% level.
Fed Governor Waller said inflation data needs to be watched for a few more months to confirm whether the economy is on track to price stability; Fed Vice Chair Jefferson said it would be appropriate to cut interest rates later this year, but be wary of overly loose policy; Governor Cook said he would like to see more progress on inflation.
Economists from Hatzius and Goldman Sachs specifically notedThere have been two changes in the Fed's thinking.
First,With strong economic data, they are no longer so worried about keeping interest rates too high for too longand believes that the biggest risk posed by past rate hikes has passed, meaning that "there is therefore no urgent need for a rate cut".
Secondly,The Fed** wants more definitive evidence that inflation will be close to 2% before a rate cut。Goldman Sachs economists wrote in the report:
"Part of this is due to concerns among some that stronger economic performance could hinder further progress in reducing inflation. ”