Big Banks Are Split on How Fast Fed Will Cut Interest Rates
- JPMorgan forecast another half-point reduction in November
- Goldman Sachs expects ‘longer string’ of quarter-point cuts
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Wall Street’s biggest banks are divided over how fast and deep the Federal Reserve will cut interest rates over the next year, setting the stage for jittery financial markets until the outlook clears.
Hours after the US central bank surprised most Fed watchers on Wednesday by cutting its benchmark by half a percentage point, economists at Goldman Sachs Group Inc. revised their forecast to show quarter-point reductions at every meeting from November through next June. Peers at JPMorgan Chase & Co., who’d correctly predicted this week’s shift, still see another half-point in November, but say that will depend on the state of the labor market.