The American bank Goldman Sachs Group has changed its forecast for the trajectory of the federal funds rate of the US Federal Reserve System (Fed) for 2024, Report informs via Interfax.
The forecast was revised against the backdrop of recent statements by Fed leaders and the minutes of the January meeting.
According to new estimates, the rate will be reduced four times in 2024, not five as previously assumed. The first cut of 25 basis points (bps) is expected in June.
Fed Board of Governors member Michelle Bowman stressed that the time has not yet come for a rate cut. The head of the Federal Reserve Bank of Minneapolis, Neel Kashkari, noted that he wants to wait a little longer before cutting the rate. Federal Reserve Bank of Atlanta Chairman Raphael Bostic said that a change in monetary policy towards a more neutral direction will happen in the summer.
All these statements indicate that the majority of the Fed does not want to rush into easing monetary policy, which is reflected in the new forecast from Goldman.
In 2025, the bank expects four more rate cuts.
The Fed's own dot plot shows that 11 of 19 US central bankers expect a rate cut of at least 75 bps in 2024. New forecasts will be released along with the results of the next meeting, which will be held on March 19-20.
