Jerome Powell Speech Signals Goldman Sachs Strategists Expect Two More 25bp Rate Cuts in 2024 from the Fed
In a recent speech, Federal Reserve Chair Jerome Powell hinted at the possibility of two more 25 basis point rate cuts in 2024, according to Goldman Sachs strategists. Powell emphasized that the Fed is not in a rush to lower rates quickly and that the process will unfold gradually over time. He also highlighted the strength of the overall economy, citing positive updates to the national accounts and the saving rate.
While Powell expressed confidence in the economy, he did acknowledge some concerns about the labor market, specifically noting a decrease in job creation. Despite this, he reiterated the Fed's commitment to achieving 2 percent inflation without the need for further cooling in labor market conditions.
Goldman Sachs sees Powell's remarks as aligning with their forecast for 25bp cuts in November and December, with the choice between 25bp and 50bp in November being a close call. The Fed initiated its policy shift with a 50bp rate cut last month, the first reduction since 2020.
Analysis: Powell's comments indicate a cautious approach to rate cuts, balancing economic strength with potential labor market challenges. Investors should monitor future Fed decisions closely, as they could impact market conditions and investment strategies. It is essential to stay informed and adapt financial plans accordingly to navigate potential changes in interest rates and economic conditions.