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Fed unlikely to cut interest rates until 2024, Goldman Sachs says
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The Federal Reserve is unlikely to pivot and cut its benchmark interest rate until 2024 at the soonest as it tries to crush the hottest inflation in four decades, according to Goldman Sachs strategists.
The bank's economists — led by Jan Hatzius — predicted in an analyst note on Monday that the U.S. central bank will raise interest rates four more times between now and the end of 2023, eventually holding them at a range between 4.25% to 4.50% until 2024.
The analyst note comes ahead of the Fed's two-day meeting this week, during which Hatzius now sees policymakers approving a third consecutive 75-basis-point interest rate increase — triple the usual size.
Goldman Sachs then predicted that the Fed will deliver back-to-back half-percentage point increases in November and December, followed by one quarter-percentage point hike in 2023 and one rate cut in 2024.
INFLATION ROSE FASTER THAN EXPECTED IN AUGUST, KEEPING PRICES PAINFULLY HIGH