Fed unlikely to start a full-on easing cycle - Goldman Sachs

Omkar Godbole FXStreet Contributor

The US Federal Reserve (Fed) is widely expected to cut interest rates by a quarter-point to 2.00-2.25% on July 31.

That would be an insurance cut – a proactive move to protect against growing downside risks, according to analysts at Goldman Sachs.

Notably, while market-implied odds are consistent with a turn in the cycle, Goldman Sachs analysts do not foresee Fed starting a full-blown easing cycle in the near-term.

Key quotes

“Our reasoning for policy easing – slowing growth against a backdrop of subdued inflation and elevated uncertainty – is consistent with the Fed’s reasoning for insurance cuts.”

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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