Goldman Sachs analysts: Maintain the view that the Fed will cut interest rates for the first time in July

On May 23, Fed Governor Waller had a busy day on Tuesday. Before the market opened, he expressed doubts about a rate cut in July, saying he needed to see "several months of good inflation data" before considering a rate cut. This is not good news for those who still hold out hope for a rate cut in July. "There are only two months of inflation data between now and the July meeting, and the threshold of 'several months of data' suggests that the threshold for inflation alone to drive a rate cut is quite high," Goldman Sachs Chief Economist Jan Hatzius and his team wrote. But the analysts did not change their basic view that the first rate cut will come in July, with a total of two rate cuts in 2024. "First, Waller's views may not represent the entire FOMC," they wrote. "In addition, labor market data have slowed in recent months, and further softening in the coming months, combined with a modest improvement in inflation data, should convince the FOMC to begin policy normalization earlier than Waller's timetable." (Jin Shi)