Goldman Sachs are now forecasting the first Fed rate cut in May, from March prior

<p>Goldman Sachs were long-time proponents of a March 2024 Federal Open Market Committee (FOMC) cut to the Fed Funds rate.</p><p>They've now changed that call to May given the communications from the Committee and jpw on Wednesday.</p><ul><li> Powell gave a strong signal that a March funds rate cut ‘is probably not the most likely case.’ </li><li>Given this comment — as well as our expectation of solid growth in Q1 and a temporary firming in sequential inflation in January — we have pushed back our forecast of the first cut from March to May.”</li></ul><ul><li>we continue to expect 5 cuts in 2024 and 3 more in 2025</li><li>We now expect the FOMC to deliver four consecutive cuts at the May, June, July, and September meetings before slowing to a quarterly pace and adding a final cut this year in December.</li><li>because we expect core PCE inflation to fall at least a couple of tenths below the FOMC’s 2.4% median projection”</li></ul><p>Earlier responses along similar lines:</p><ul><li><a href="https://www.forexlive.com/centralbank/jp-morgan-forecast-the-first-fomc-rate-cut-in-june-but-are-wavering-on-perhaps-may-20240131/" target="_blank" rel="follow" data-article-link="true">JP Morgan forecast the first FOMC rate cut in June, but are wavering on perhaps May</a></li><li><a href="https://www.forexlive.com/centralbank/fitch-responds-to-the-fomc-and-powell-we-dont-see-rate-cuts-until-june-or-july-20240131/" target="_blank" rel="follow" data-article-link="true">Fitch responds to the FOMC and Powell – "we don’t see rate cuts until June or July"</a></li></ul><p>But, none are as good as this one!</p><ul><li><a href="https://www.forexlive.com/centralbank/boa-says-powell-hoodwinked-the-markets-all-fooled-by-maradona-theory-of-interest-rates-20240131/" target="_blank" rel="follow" data-article-link="true">BoA says Powell hoodwinked the markets – all fooled by ‘Maradona Theory of Interest Rates’</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.