Goldman Sachs Chief Economist Jan Hatzius writes that the latest set of FOMC January meeting minutes were “consistent” with the firm’s forecast that – absent further labor market weakness – the FOMC is unlikely to cut again for a while. Goldman Sachs continues to expect the next rate cut in June, followed by a second 25bp cut in September. The Fed staff’s GDP growth forecast at the January meeting was also “stronger” than at the December meeting, expecting GDP to grow above potential through 2028 while also leading the unemployment rate to decline below its natural rate by the end of 2026, Hatzius writes.
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