Goldman Sachs: The Federal Reserve has every reason to cut interest rates in July

Jan Hatzius, chief economist at Goldman Sachs, said they see "good reasons" for the Federal Reserve to cut interest rates at its July meeting, but did not change their forecast that the Fed will start cutting rates in September. According to the latest unemployment and inflation data, the federal funds rate of 4% is appropriate, compared to the current 5.25% -5.5%. Therefore, the rate cut is expected to begin soon. Reasons to act in July include the volatility of monthly inflation, which could make the September rate cut difficult to explain if there is a temporary reacceleration, and the Fed's undeniable motivation to "avoid starting a rate cut in the final two months of the presidential campaign." While that doesn't mean the Federal Reserve can't start cutting interest rates in September, July is more appropriate.