Goldman Sachs Raises PCE Growth Forecast to 3.5% on Lower Tariffs
1min read Goldman Sachs has revised its forecast for the core personal consumption expenditure (PCE) growth rate, now expecting it to rise to 3.5% this year, up from the previous expectation of 3.0%. This adjustment is attributed to lower tariffs, which are anticipated to have a positive impact on economic growth.
Despite the upward revision in the PCE growth rate, goldman sachs maintains its expectation that the Federal Reserve will cut interest rates three times in the second half of this year. This move is seen as a necessary measure to mitigate the potential negative effects on economic growth and employment that could arise from the revised tariff policies.
According to the analyst's forecast, the Federal Reserve's decision to cut interest rates is aimed at supporting economic stability and ensuring that the benefits of lower tariffs are fully realized. By reducing interest rates, the Federal Reserve can stimulate economic activity, encourage investment, and maintain employment levels, thereby fostering a more robust economic environment.
This strategic move by the Federal Reserve is expected to provide a buffer against any potential economic downturns that could result from the implementation of new tariff policies. By proactively addressing these concerns, the Federal Reserve aims to create a more favorable economic landscape for businesses and consumers alike.
