CEO Morning Brief

Goldman Expects Series of Consecutive 25 Bps Fed Cuts Ahead

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Publish date: Fri, 18 Oct 2024, 11:52 PM
TheEdge CEO Morning Brief

BENGALURU (Oct 17): Goldman Sachs said on Wednesday it expects the US Federal Reserve (Fed) to deliver consecutive 25-basis-point (bps) interest rate cuts from November this year through June 2025 to a terminal rate range of 3.25% to 3.5%.

Last month, the US central bank cut the overnight rate by half a percentage point, citing greater confidence that inflation will keep receding to its 2% annual target.

The overnight rate, which guides how much interest banks pay each other and affects rates for consumers, is now at 4.75%-5.00%.

Markets are currently pricing in a 94.1% chance for a cut of 25 bps at the Fed's next meeting, with only a 5.9% chance the central bank will hold rates steady, according to CME's Fedwatch Tool.

Goldman Sachs also said it expects the European Central Bank to cut interest rates by 25 bps at its monetary policy meeting on Thursday, and noted that it sees sequential 25 bps cuts until the policy rate reaches 2% in June 2025.

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Source: TheEdge - 18 Oct 2024

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