Goldman Sachs chief economist Jan Hatzius concludes that today’s FOMC statement acknowledging that the “implications of developments in the Middle East for the U.S. economy are uncertain” – along with Fed Chair Powell press conference remarking that the FOMC will have to “wait and see” four times – was “a bit hawkish”. Only one participant dissented in favor of a cut, against the firm’s expectation that three would call for more easing, Hatzius adds. Goldman writes however that the firm continues to expect two more 25bp rate cuts in September and December to 3.00%-3.25% as it believes that unemployment rate will rise to 4.6%, above the FOMC’s median projection of 4.4%.
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