Economists Adjust Expectations Amid Mixed Economic Signals

  • Goldman Sachs economists push back their expectations for the first Federal Reserve interest rate cut to September from July
  • Recent speeches from Fed officials indicate that a July cut would require better inflation numbers and signs of softness in activity or the labor market
  • Data released on Thursday showed lower weekly jobless benefit claims and stronger purchasing managers indexes
  • U.S. stocks slumped as a result, with the Dow Jones Industrial Average seeing its biggest decline in over a year
  • Bond yields rose due to the new information
  • The timing of the first cut remains uncertain, but market expectations align with Goldman’s forecast for a September cut at 54% chance, compared to only 12% for July

Goldman Sachs economists have adjusted their expectations for the first Federal Reserve interest rate cut from July to September, citing recent speeches by Fed officials that suggest a July cut would require better inflation numbers and clearer signs of economic softness. Recent data, including lower weekly jobless claims and stronger purchasing managers indexes, has added to this uncertainty. As a result, U.S. stocks experienced a significant decline, with the Dow Jones Industrial Average seeing its largest drop in over a year. Bond yields also rose. The timing of the first rate cut remains uncertain, but market expectations align with Goldman’s forecast for a 54% chance of a September cut and only a 12% chance for July.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Goldman Sachs economists’ updated expectations for the first Federal Reserve interest rate cut, citing specific reasons such as recent speeches from Fed officials and data on jobless claims and purchasing managers indexes. It also mentions market expectations according to CME FedWatch tool. The article is concise and relevant to the main topic without any clear signs of sensationalism or personal perspective.
Noise Level: 3
Noise Justification: The article provides relevant information about economists at Goldman Sachs adjusting their expectations for the first Federal Reserve interest rate cut, but it lacks depth and analysis. It also includes some irrelevant elements such as mentioning text-to-speech technology and a call to action for feedback.
Public Companies: Goldman Sachs (GS)
Key People: Economists at Goldman Sachs (Economists)

Track all markets on TradingView

Financial Relevance: Yes
Financial Markets Impacted: U.S. stocks and bond yields
Financial Rating Justification: The article discusses the expectations for Federal Reserve interest rate cuts and their impact on U.S. financial markets, specifically mentioning the Dow Jones Industrial Average and bond yields.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the article. It discusses economic forecasts and market expectations related to interest rate cuts and inflation.

Reported publicly: www.marketwatch.com