Goldman Sachs: US growth shock means Fed will be in "some degree of rate cut mode"

Ashish Shash, chief investment officer at Goldman Sachs Asset Management Public Investments, said the "growth shock" currently facing the US meant that the Federal Reserve was "set to enter some degree of rate-cutting mode this year, beyond what was expected six weeks ago or two months ago". "What we're seeing in the bond market is a reasonable pricing of the Fed opening its window, or the market saying the Fed may actually have to ease policy further," Mr. Shash said. He added that recent economic data confirmed that view, but "the level of additional tariffs we've seen in the last 24 hours... raises that expectation even further." Thursday's market pricing showed investors expected three to four rate cuts in 2025, up from about three the day before.