Goldman Sachs: The Fed has good reason to cut interest rates in July
Odaily Odaily News: Jan Hatzius, chief economist at Goldman Sachs, said they believe the Fed has "good reason" to cut interest rates at the July meeting, but did not change their forecast that the Fed will start cutting interest rates in September. According to the latest unemployment and inflation data, a federal funds rate of 4% is appropriate, while it is currently 5.25%-5.5%. Therefore, rate cuts are expected to begin soon. Reasons for taking action in July include the volatility of monthly inflation, which could make September rate cuts difficult to explain if there is a temporary re-acceleration, and the Fed's undeniable motivation to "avoid starting rate cuts in the last two months of the presidential campaign." While this does not mean that the Fed cannot start cutting interest rates in September, it is indeed more appropriate in July. (Jinshi)
