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Oct 17 - 02:55 PM

Goldman Sachs: Our Latest Forecast for the US GDP Growth and Fed Call

By eFXdata  —  Oct 17 - 01:30 PM

Synopsis:

Goldman Sachs forecasts robust US GDP growth and outlines its expectations for Federal Reserve rate cuts in the coming months.

Key Points:

  • 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.

Source:
Goldman Sachs Research/Market Commentary

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