Goldman Sachs: Fed won’t cut rates this year

New York, July 27, 2016: A blue logo of Goldman Sachs on a metallic convex surface. - Görsel
Goldman Sachs: Fed won’t cut rates this year

Goldman Sachs on Monday warned that the general consensus that the Federal Reserve will cut rates soon is misguided, according to a story by CNBC. Jan Hatzius, the bank’s chief economist, said, “Although it is a close call, we still expect the FOMC to keep the funds rate unchanged in the remainder of the year.” He added, “In our view, this was not a strong hint of an upcoming cut but was simply meant to provide reassurance that the FOMC is well aware of the risks from the trade war.” Last week, Fed Chairman Jerome Powell said the Fed will “act as appropriate to sustain the expansion, ” which is interpreted by markets as a signal of rate cuts soon. “A speech from the Chair focused exclusively on longer-term issues at a time of sharply increased worries about trade policy might otherwise have come across as ‘out of touch’ to some market participants,” Hatzius added.