• Goldman Sachs predicts the Federal Reserve will begin lowering its benchmark interest rate in the second quarter of 2024.
• Fundstrat Global Advisors managing partner Tom Lee also predicted that the Fed is finished with rate hikes.
• Consumer prices rose 0.2% in July, which the White House described as “at market expectations.”
Goldman Sachs Predicts Federal Reserve Timeline
Economists at Goldman Sachs believe that the U.S. Federal Reserve will start reducing its benchmark interest rate in the second quarter of 2024. They are of the opinion that there will be no more rate hikes this month and November.
Tom Lee’s Opinion on Rate Hikes
Fundstrat Global Advisors managing partner Tom Lee believes that last week’s CPI (consumer price index) report has shown inflation to be on a downward trajectory, thus allowing the Fed to not raise rates further. He discussed how core CPI could potentially drop below 0.2 over the next three months, which would give room for more breathing space for The Fed when it comes to adjusting their rates further.
Consumer Price Index Report
The consumer price index is an important metric used to measure inflation rates, and traders pay close attention to it as it can signal whether or not The Fed will continue raising interest rates further. Last week’s CPI report showed a rise of 0.2%, which was seen as ‘expected’ by The White House administration.
It seems likely that The Federal Reserve could soon begin cutting back its benchmark interest rate in order to get closer to their target inflation rate, although this remains uncertain until confirmed by The Fed themselves in due course – something worth keeping an eye out for over forthcoming months!
Daily Hodl Staff August 16th 2023: Goldman Sachs Predicts Federal Reserve Timeline for Slashing Interest Rates by 0 25% per Quarter: Report