Fed's Kashkari raises prospect of zero rate cuts — but Goldman says that would be ‘very surprising'
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Goldman Sachs Chief Economist Jan Hatzius expects three interest rate cuts from the Federal Reserve this year. Minneapolis Fed President Neel Kashkari floated the possibility of zero rate cuts in 2024 if inflation remained sticky. Hatzius said he would be 'very surprised' if no rate cuts were implemented. Fed Chair Jerome Powell stated that it would take time to evaluate the current state of inflation, leaving the timing of potential rate cuts uncertain. Market participants are closely monitoring comments from Fed officials for clues on the labor market and inflation. Hatzius is optimistic about the U.S. economy, projecting close to 3% growth this year and a 15% recession probability over the next 12 months. He also expects cooling inflation, with the personal consumption expenditures price index at 2.4% by the end of 2024 and 2% next year. The Fed held interest rates steady last month and signaled three quarter-percentage point cuts by the end of 2024. Traders anticipate a 94% likelihood of rates remaining unchanged in May and a 60% probability of a cut in June.

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https://www.cnbc.com/2024/04/05/top-goldman-economist-downplays-prospect-of-zero-fed-rate-cuts-in-2024.html