From Financial Modeling Prep: 2025-01-27 05:24:58

Goldman Sachs warns that markets may be ignoring lessons from 2019, expecting little new information from the January FOMC meeting. While acknowledging labor market stabilization, the meeting is unlikely to provide clear guidance on future rate adjustments.

Goldman Sachs speculates that declining inflation could prompt rate cuts, questioning if the current funds rate is too restrictive. They emphasize monitoring this issue as it may impact future monetary policy decisions.

Despite potential for rate cuts due to declining inflation, they are not deemed necessary yet. Goldman Sachs predicts inflation moving towards the 2% target, allowing for gradual economic recovery in 2025.

Uncertainty around tariff hikes will influence the FOMC’s decisions, with Goldman Sachs estimating a modest 0.3 percentage point increase in inflation. If tariffs do not significantly impact inflation, room for rate reductions may be preserved.

Goldman Sachs remains optimistic for 2025, anticipating a modest labor market recovery, lower inflation rates, and GDP growth exceeding consensus forecasts. This positive economic outlook is expected to maintain stability in key financial metrics.



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