David Mericle, Goldman Sachs’ chief US economist, believes President Trump’s tariffs will not lead to prolonged inflation, predicting instead that the Fed will implement three rate cuts in 2024, beginning in September. Mericle points to stabilizing inflation trends, with underlying rates moving toward the Fed’s 2% target, despite temporary tariff-related boosts. He attributes this stability to rebalanced labor market conditions, contrasting today’s economic backdrop with the tight labor market of 2022. Mericle emphasizes that tariff effects will likely be short-lived, as supply-demand dynamics and fading ‘catch-up inflation’ mitigate risks of unanchored inflation expectations.
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0 posts last weekGoldman Sachs Upgrades S&P 500 Forecast Amid Fed Rate Cut Bets
Goldman Sachs Research has significantly upgraded its S&P 500 forecast, raising the 12-month target from 6,500 to 6,900 and year-end projection from 6,100 to 6,600. This revision follows new analysis showing a greater than 50% chance of Fed rate cuts beginning in September, with additional reductions expected through 2026. The bank cites less severe tariff impacts under Trump’s policies and a gradually softening labor market as key factors. The CME FedWatch Tool currently estimates a 62.7% probability of a September rate cut. At publication, the S&P 500 stands at 6,225.52, showing recent gains of 0.5% weekly and 3.66% monthly.
about Goldman Sachs Upgrades S&P 500 Forecast Amid Fed Rate Cut Bets