PANews reported on July 1st that Goldman Sachs' economic research team's latest forecast suggests the Federal Reserve may start cutting rates as early as September this year, with 25 basis point cuts at meetings in September, October, and December, lowering the terminal rate expectation from 3.5%-3.75% to 3%-3.25%. Goldman Sachs believes that the inflationary impact of tariffs is weaker than expected, and soft labor market and data fluctuations may contribute to this outcome.
Goldman Sachs analysts noted that if this week's employment data performs poorly, the probability of rate cuts will further increase, but they expect no action will be taken at the July meeting. In contrast, Morgan Stanley analysts believe the Federal Reserve is less likely to cut rates in the near term, especially at the July meeting. Morgan Stanley anticipates the upcoming employment report will remain robust, with slowing growth but not enough to prompt accelerated action by the Federal Reserve.
Additionally, Chicago Fed President Goolsbee stated that the current unemployment rate and inflation level in the United States are far below the stagflation levels of the 1970s, and tariffs or supply shocks are unlikely to trigger a similar crisis in the short term. Atlanta Fed President Bostic, meanwhile, believes the comprehensive impact of Trump's tariffs has not yet been fully revealed and expects the Federal Reserve may only cut rates once this year.
