"Goldman Sachs predicts Fed rate cuts in response to cooling inflation"

Goldman Sachs predicts that the Federal Reserve will begin cutting interest rates in the third quarter of 2024, earlier than previously expected, as inflation is projected to cool faster than initially forecasted. The firm's economists now anticipate inflation reaching 2.5% by the second quarter of next year, compared to their previous estimate of the fourth quarter of 2024. These interest rate reductions are seen as "normalization cuts" to bring rates down from 22-year highs. The Fed is expected to hold interest rates steady in its final monetary policy decision of the year. However, Goldman Sachs warns that projections for rate cuts are subject to minor movements in inflation forecasts and the need to assess wage growth.