The Fed May Surprise Wall Street and Shun Cuts in Interest Rates

The Fed May Surprise Wall Street and Shun Cuts in Interest Rates


It’s risk on again for many investors as they scoop up stocks on bets the Federal Reserve will cut interest rates before the year is out, but there are some on Wall Street that are not so convinced. Economists at Goldman Sachs think the Fed will hold off on interest rate cuts for at least the next two years, a view that runs contrary to what markets are currently predicting. 


“Our economists’ base case forecast is the Fed does not cut interest rates during the next 2 years, but the team views mounting trade tensions as a source of downside risk that is likely to get worse before it gets better,” says Goldman in last week’s version of their Weekly Kickstart report. 


Why Rate Cuts May Not Happen

  • Goldman economists’ base case sees no rate cuts for 2 years;
  • 30 experts’ median forecast is for unchanged funds rate by end of 2019;
  • A minority of the 30 forecasters, 13, sees some amount of easing.

Source: Goldman Sachs, FactSet


What It Means for Investors







Looking Ahead




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