Goldman Sachs chief economist Jan Hatzius writes that following today’s FOMC easing, the firm continues to expect an additional two 25bps rate cuts this year, though a 50bps cut is possible if the labor market weakens more than expected. Goldman also sees two cuts in 2026 to 3.00%-3.25%, noting that its rate path expectation tilts “a bit more dovish” than the market pricing. The statement added dovish language, similar to that used in September 2024 and in Chair Powell’s Jackson Hole speech, Hatzius states. Goldman also believes that Chair Powell’s description of labor market developments also highlighted additional weakness beyond the rise in the unemployment rate.
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