Goldman Sachs expects gradual cut in Fed interest by mid-2024

Goldman Sachs economists said on Sunday it expected the U.S. Federal Reserve to start cutting interest rates in the second quarter of 2024, driven by a desire to adjust interest from a stringent level once inflation approaches the target level.

“The cuts in our forecast are driven by this desire to normalise the funds rate from a restrictive level once inflation is closer to target, not by a recession,” Goldman Sachs Chief U.S. economist David Mericle wrote.

Fed policymakers recently raised their interest rate targets from 5.25 percent to 5.75 percent, while Goldman Sachs now expects interest rates to finally settle near 3.25 percent.