Goldman Sachs Analyst: Maintains View of First Rate Cut by the Fed in July

ChainCatcher news, Federal Reserve Governor Waller had a busy day on Tuesday. Before the market opened, he expressed skepticism about a rate cut in July, stating that he needs to see "a few months of good inflation data" before considering a rate cut. This is not good news for those still hoping for a rate cut in July.

Goldman Sachs Chief Economist Jan Hatzius and his team wrote: "There are only two months of inflation data from now until the July meeting, and the threshold of a few months of data indicates that the bar for a rate cut based solely on inflation is quite high."

However, analysts have not changed their fundamental view that the first rate cut will occur in July, with a total of two rate cuts in 2024. They wrote: "First, Waller's view may not represent the entire FOMC. Additionally, the labor market data has already slowed in recent months, and further softening in the coming months, coupled with a moderate improvement in inflation data, should persuade the FOMC to begin normalizing policy earlier than Waller's timeline."