Economists Forecast More Fed Rate Cuts And Even Zero Rate
MarketPulse | Aug 13, 2019 02:22AM ET
As trade tensions escalate and economic indicators weaken, Wall Street is beginning to anticipate more aggressive interest rate cuts for the Federal Reserve, with at least one forecast going so far as seeing a return to near-zero.
Economists now see the likelihood of three quarter-point reductions before the end of the year, along with multiple moves in 2020 until it becomes clear that the U.S. central bank has staved off a recession. The anticipation comes as Goldman Sachs (NYSE:GS) just announced that it reduced its GDP projections by 0.2 percentage points and Bank of America (NYSE:BAC) Merill Lynch said it sees increasing chances of a recession in the next 12 months.
Other forecasters on the Street are joining the calls for weakening conditions that prompt the Fed to take a sharper knife to rates than officials indicated at the July meeting, which saw the first rate reduction in 11 years.
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