Goldman Sachs analysts Jan Hatzius and David Mericle have written a critical analysis of the Fed’s next rate policy. In the evaluation note written yesterday to the bank customers, it was said that the interest hike has now stopped in the institution.
“As inflation approaches target…”
The following statements were included in the analysis, suggesting that the Fed wanted to cut interest rate hikes as inflation approached the 2% target:
“We see the Fed poised to cut interest rate hikes as it approaches the long-awaited inflation rate. The institution wants interest rates to normalize, but is in no hurry to do so. Therefore, we expect interest rates to remain stable for some time. We expect a rate cut in the second quarter of 2024 and a rate cut of 25 basis points per quarter. However, we are not quite sure about the discount rate.
As will be recalled, last week inflation rose less than expected and the figures were lower than what experts had predicted. The annual inflation growth was declared at 3.2%. A month ago this figure was 3%.
In March last year, the Fed began one of the fastest rate hikes in its history and raised interest rates 10 times in a row, including four consecutive 75 basis points. For the first time in a long time, the institution suspended its hikes in June, but once again increased by 25 basis points in July.
There will be no FOMC meeting in August where the Fed will decide on interest rates. The next meeting will be at the end of September.
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