Goldman Economists Pencil In First Fed Rate Cut for Q2 of 2024

Goldman Sachs predicts rate cuts in 2024, not due to economic slowdown but as a move towards policy normalization. They foresee 25 basis point cuts per quarter starting from June, aiming to adjust the Fed funds rate to a more normal level as inflation nears target. The prediction was influenced by recent inflation data showing a month-on-month increase below the Fed's 2% target. Goldman estimates the neutral rate for the US economy to stabilize between 3% and 3.25%, which is higher than the Fed's expectation but lower than current market pricing.

What is the primary reason Goldman Sachs is predicting interest rate cuts in 2024?

• Economic slowdown

• Market pressure

• Policy normalization

• Hard landing

When does Goldman Sachs expect the 25 basis point cuts to begin?

• End of December

• End of September

• End of June

• End of March

What inflation rate prompted Goldman's prediction for rate cuts?

• 0.5% monthly

• 0.3% monthly

• 0.2% monthly

• 0.1% monthly

To what range does Goldman Sachs expect the Fed funds rate to stabilize?

• 4% to 4.5%

• 3.5% to 4%

• 3% to 3.25%

• 2% to 2.5%

How does Goldman's expected neutral rate compare to the Fed's expectations?

• Below the Fed's expectations

• Above the Fed's expectations

• Unrelated to the Fed's expectations

• Equal to the Fed's expectations