Goldman Sachs Now Predicts Fed To Cut Interest Rate In Q4 2024

Posted September 21, 2023

Goldman Sachs economists now expect the U.S. Federal Reserve to begin cutting interest rates in the fourth quarter of 2024, compared to their previous prediction of second quarter cutting, following the Fed’s decision to keep rates unchanged on Wednesday.

The U.S. Federal Reserve decided to hold interest rates in the 5.25 to 5.5 percent range, according to updated quarterly projections released by the U.S. central bank. Furthermore, Goldman Sachs’ projections now predict a cut of 50 basis points, a decreased estimate compared to their previous full percentage point cut.

“Today, participants appeared to move away from the view that monetary policy tightening could weigh on growth with a long lag next year, which weakens one argument for cutting,” Goldman Sachs economist Jan Hatzius said in a note.

The U.S. central bank’s quarterly projections show the rate could increase once again in 2023 to a peak 5.5 to 5.75 percentage range.

Last week, Goldman Sachs reported that the U.S. chance of slipping into recession is only 15 percent compared to higher predictions made by its peers.