According to the macroeconomic report published by Goldman Sachs, it is stated that the Fed funding rate may fall to the range of 3.25-3.5 percent by 2025. This forecast exceeds investors’ expectations that interest rates will be around 3.75-4.0 percent by the end of 2025.
The report emphasizes that the new tariffs to be implemented by the Trump administration may increase growth risks in the US economy, and it is stated that this may pave the way for the Fed to cut interest rates. The Fed is expected to make further interest rate cuts, especially due to the impact of tariffs on automobile exports from China, Europe and Mexico.
While the bank predicts that US core inflation will decrease to 2.4 percent towards the end of 2025, it states that if Trump’s promises to impose tariffs on all trade are fulfilled, there is a risk that inflation will rise to 3.1 percent at the beginning of 2026.
Goldman Sachs predicts that the downward trend in global inflation will continue and that many major central banks will take additional easing steps until 2025. However, uncertainties in Trump’s trade policies pose a risk that could complicate the timing of the Fed’s interest rate cuts.
Source: www.dunya.com
