Goldman Sachs and Morgan Stanley differ by 125 basis points on Fed rate cut expectations

Morgan Stanley economists predict the Fed will cut interest rates significantly over the next two years as inflation cools; Goldman Sachs analysts expect the rate cuts to be smaller and start later. Morgan Stanley researchers expect the Fed to begin cutting interest rates in June 2024, then by 25 basis points at each meeting in September and after the fourth quarter. By the end of 2025, the policy interest rate will drop to 2.375%; Goldman Sachs predicts that the Federal Reserve will cut interest rates for the first time by 25 basis points in the fourth quarter of 2024, and cut interest rates once a quarter by mid-2026, with interest rates eventually falling in the range of 3.5%-3.75%. (Golden Ten)