Goldman Sachs: High inflation raises the threshold for the Federal Reserve (FED) to cut interest rates; economic indicators and inflation expectations become key variables.

Jin10 reported on March 26 that Goldman Sachs economists stated that high inflation and high inflation expectations derived from surveys have set a higher bar for the Federal Reserve's potential interest rate cuts this year. They pointed out that the survey data has become somewhat blurred due to the political leanings of the respondents, but this data cannot be ignored. They added that deteriorating economic indicators could still prompt the Federal Reserve to cut interest rates. They indicated that if "market-based inflation compensation suggests that the rising inflation trend this year will not persist beyond 2025," then Federal Reserve officials would feel reassured. Furthermore, an economic slowdown should lead to a slight decline in inflation over the next few years. Data from the Chicago Mercantile Exchange (CME) shows that there is a divergence in the futures market regarding whether there will be two or three interest rate cuts this year.