(Bloomberg) - Goldman Sachs Group Inc. Chief Executive Officer David Solomon said one or two Federal Reserve rate cuts later this year are looking increasingly likely, after predicting just two months ago there would be no rate reductions in 2024.
“One or two cuts in the fall seems more likely,” Solomon said Tuesday in a CNBC interview from Paris. “There’s no question there are some shifts in consumer behavior, and the cumulative impact of what’s been kind of a long inflationary pressure, even though it’s moderating, is having an effect on consumer habits.”
While the current economic base case remains “relatively benign,” Solomon said the outlook remains uncertain, and he questioned whether one or two rate reductions would create a “hugely different policy picture.”
“One of the things that’s still unclear is the trajectory of the economy over the next 12 to 18 months,” Solomon said. “To be so certain about the direction of travel on rates and the direction of policy, I think it’s early.”
By Sridhar Natarajan
With assistance from Hannah Levitt
