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To: Johnny Canuck who wrote (59316)5/22/2024 5:19:17 PM
From: Johnny Canuck  Read Replies (1) | Respond to of 69326
 


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Goldman Sachs CEO says Fed unlikely to cut rates this year

Suzanne McGee
UpdatedWed, May 22, 2024, 12:04 PM PDT2 min read

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By Suzanne McGee

BOSTON (Reuters) - Goldman Sachs CEO David Solomon said on Wednesday he does not expect the Federal Reserve to cut interest rates this year.

"I'm still at zero cuts," Solomon said at a Boston College event. "I think we're set up for stickier inflation."

His comments came after Federal Reserve policymakers said on Tuesday the U.S. central bank should wait several more months to ensure that inflation really is back on track to its 2% target before cutting interest rates.

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Solomon's comments stand in contrast to market expectations for at least one rate cut by the Fed this year. Traders reduced bets on Wednesday for more than one rate cut this year, after the release of minutes of the Federal Reserve's April 30-May 1 policy meeting showed rate-setters thought inflation could take longer to ease than previously thought.

Solomon told an audience of about 150 senior corporate executives and Boston College students that while he believes the U.S. economy is fundamentally quite strong, not all Americans are experiencing growth or the impact of inflation the same way.

"Inflation is not just nominal, it's cumulative," Solomon said, citing a conversation he had recently with the CEO of a grocery chain who has seen customers cutting back on the size of purchases in response to rising prices.

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"We're starting to see the average American slowing down and changing his habits," Solomon added.

The Goldman Sachs CEO also said he does expect to see interest rate cuts in Europe this year, as the region struggles with "a more sluggish economy."

He voiced concern about a number of headwinds to global growth, ranging from inflationary pressures to geopolitical concerns.

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