After the Fed significantly lowered interest rates, Goldman Sachs changed its tune: it predicts a 25 basis point rate cut before June of next year.

After the Federal Reserve cut interest rates more aggressively by 50 basis points, Goldman Sachs changed its prediction. It is now expected that from November 2024 to June 2025, the Federal Reserve will cut rates by 25 basis points at each meeting, compared to the previous forecast of consecutive cuts this year and quarterly cuts next year. Goldman Sachs predicts that by June 2025, the final rate set by the Federal Reserve will be between 3.25% and 3.5%. Goldman Sachs analysts believe that the main reason for further rate cuts is the recent signs of weakness in the US job market, causing the focus of the Federal Reserve to shift from inflation concerns to employment risks. Goldman Sachs added that Federal Reserve Chairman Powell emphasized that the speed of a 50 basis point rate cut should not be seen as a new standard. The key factor for future decisions may be the next two employment reports.