Goldman Sachs CEO David Solomon stated on Wednesday (September 11) that due to signs of weakness in the US job market, the Federal Reserve may still choose to cut interest rates more than expected.
Solomon said in an interview on Wednesday that based on further weakness in the labor market, the Federal Reserve has reason to propose a 50 basis point rate cut instead of the standard 25 basis points. "I think this possibility is around 30%
Solomon pointed out that his most optimistic speculation is that the Federal Reserve may cut interest rates by 25 basis points in September, possibly two to three times before the end of the year, and expects the US economy to have a soft landing.
And this banker had previously predicted in May that the Federal Reserve might not cut interest rates this year, which is in stark contrast to the current stance.
In addition, Jan Hatzius, Chief Economist of Goldman Sachs, also pointed out on Monday (September 9th) that "I think there is sufficient reason to cut interest rates by 50 basis points, after all, the current federal funds rate is too high
Previously, a series of economic data in August once again raised concerns on Wall Street about the steady cooling of the economy, including the US employment report and manufacturing data: non farm payroll jobs increased by 142000 in August, slightly lower than expected; The ISM Manufacturing Index was 47.2, lower than expected, and the overall trend still indicates sluggish manufacturing activity.
Investors also feel uneasy about the poor performance announced by some companies. For example, US discount retail giants Dollar Tree and Dollar General, which specialize in sinking markets, have reduced their annual profit expectations, raising the red light of sluggish consumption among middle and low-income groups.
However, the latest inflation data released on Wednesday showed an unexpected rebound in underlying inflation in the United States. Before the US stock market opened, the US Department of Labor announced that the core month on month inflation rate for August rebounded beyond expectations, which suppressed traders' expectations of the Fed's interest rate cuts, with support for a 25 basis point rate cut increasing.
The Federal Reserve is about to make its next monetary policy decision on September 18th. Investors' attention is currently generally focused on the Federal Reserve.