TechFlow, July 1 - According to Jinshi Data, Goldman Sachs' economics research team has updated its latest report, moving forward its forecast for the Fed's first rate cut from December to September. The firm now expects three consecutive 25-basis-point cuts in September, October, and December 2025. Goldman Sachs' chief economist Jan Hatzius sees a slightly above 50% chance of a September rate cut, citing weaker-than-expected inflationary impact from tariffs and tangible softness in the labor market.
At the same time, Goldman has lowered its projection for the terminal federal funds rate from 3.5%-3.75% to 3%-3.25%. However, the firm emphasized that unless this week's employment data falls significantly below expectations, no rate cut will occur at the July meeting.
In contrast, Morgan Stanley maintains a more cautious stance, believing near-term rate cuts by the Fed are unlikely, with most Fed officials still supporting Powell's cautious approach.
