Synopsis:
Goldman Sachs forecasts robust US GDP growth and outlines its expectations for Federal Reserve rate cuts in the coming months.
Key Points:
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GDP Growth Forecast:
Goldman Sachs anticipates above-consensus real GDP growth of 2.5% for 2024 on a Q4/Q4 basis, driven by strong consumer spending, improved financial conditions, and a rebound in inventory investment. -
Inflation Expectations:
The firm projects core PCE inflation to reach 2.6% year-over-year by December 2024, before converging towards the 2% target in 2025, aided by rebalancing in the auto and housing rental markets. -
Unemployment Rate Outlook:
The unemployment rate is expected to end 2024 at 4.1%, with a gradual decline to 3.8% over the subsequent two years. -
Fed Rate Cuts:
Goldman Sachs expects the Federal Reserve to implement consecutive 25 basis point cuts from November 2024 through June 2025, resulting in a terminal rate range of 3.25-3.5%.
Conclusion:
With a positive outlook for US economic growth and a planned easing of monetary policy, Goldman Sachs suggests that consumers and businesses may benefit from improved financial conditions and gradual inflation stabilization in the years to come.