Goldman Sachs: The Federal Reserve has ample reason to cut interest rates in July

ChainCatcher news, according to Jin Shi reports, Goldman Sachs chief economist Jan Hatzius stated that they believe the Federal Reserve "has ample reason" to cut interest rates at the July meeting, but they have not changed their forecast that the Fed will start cutting rates in September. Based on the latest unemployment and inflation data, a federal funds rate of 4% is deemed appropriate, while the current rate is 5.25%-5.5%.

Therefore, a rate cut is expected to begin soon. Reasons for taking action in July include the volatility of monthly inflation, which, if there is a temporary re-acceleration, could make a rate cut in September difficult to justify, as well as the undeniable motivation for the Fed to "avoid starting rate cuts in the last two months of the presidential campaign." While this does not mean the Fed cannot start cutting rates in September, July is indeed more appropriate.