Goldman Sachs economists including Jan Hatzius and David Mericle predicted in a report on Sunday that the Fed will not raise interest rates again this year and will begin cutting rates in the second quarter of next year.
The reason they give is that once U.S. inflation approaches target, the federal funds rate will move from a restrictive level to normal.
Goldman Sachs expects the Fed to skip raising interest rates next month and will conclude at its November meeting that core inflation trends have slowed and no further rate hikes are needed. Goldman Sachs expects the federal funds rate to eventually stabilize at 3%-3.25%.