Goldman Sachs: Inflation to Fall in 2023 Allowing Fed to Begin Rate Cuts, But Rates to Remain Well Above Pre-Pandemic Lows
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Goldman forecasts core inflation will enter its “final descent” next year toward the Fed’s 2% target.
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The bank expects the Fed to begin cutting rates in early 2023, delivering cuts until 2026 when rates settle around 3.5-3.75%.
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Rates are expected to remain far above near-zero levels seen before the hiking cycle began.
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Goldman named potential oil price shocks or financial system instability as risks to the rate forecast.
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Since early 2021, the Fed has quickly raised rates from near zero to over 5% to fight inflation.