Goldman Sachs expects the Fed will not cut interest rates in January.

In a memo published on Sunday, economists at the American investment bank Goldman Sachs outlined their expectations regarding the U.S. Federal Reserve's interest rate movements in the upcoming meetings. According to the memo, Goldman Sachs economists anticipate that the Federal Reserve may abandon any cuts to interest rates in its next meeting in January, indicating that it is likely the central bank will hint at a slower pace of rate cuts going forward during the Federal Open Market Committee meeting later this week. The investment bank experts added that while they expect the Federal Reserve to lower interest rates by 25 basis points after the conclusion of the meeting on Wednesday, recent comments from central bank officials suggest a clear desire to slow the pace of rate reductions. Economists at Morgan Stanley, led by Jan Hatzius, attributed their forecasts to expectations that the United States will record lower unemployment rates than what the Federal Reserve has anticipated for 2024, while inflation still remains above the central bank's target. Morgan Stanley analysts pointed out that the key messages from the statement and the press conference are expected to focus on the relative emphasis on slowing the pace of rate cuts, and that interest rate decisions will continue to be challenged from meeting to meeting based on data. This comes at a time when Goldman Sachs sees another rate cut in meetings scheduled for March, June, and September of next year, with the bank's experts expecting the final interest rate in the current rate-cutting cycle to settle in a range between 3.5% and 3.75%. Goldman experts clarified that their core expectations, according to the probabilities, remain somewhat more pessimistic than market pricing, primarily because they perceive that risks to interest rates from potential political changes during a second Trump term are greater than they were before his first term in office.