Economy

Goldman Sachs no longer expects US interest rate cut in May

FILE PHOTO: The Federal Reserve building in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts/File Photo

SINGAPORE (Reuters) – Goldman Sachs’ analysts no longer expect a U.S. interest rate cut in May and see four 25 basis point cuts this year, as policymakers’ rhetoric suggests they are in no rush.

Federal Reserve Governor Christopher Waller said on Thursday he needed to see a few more months of inflation data to check the economy was on track toward price stability.

“Because there are only two rounds of inflation data and a little over two months until the May (Fed) meeting, his comments suggest to us that a rate cut as early as May, which we had previously expected, is unlikely,” Goldman Sachs analysts said in a note. They now forecast an extra cut next year instead, with an unchanged terminal rate forecast of 3.25-3.5%.

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