Fed cautious about interest rate cuts this year

Goldman Sachs analysts predict that the Federal Reserve will be cautious about cutting interest rates this year. They expect the Fed to update its interest rate projections during this week's meeting but remain hesitant to signal any major changes. The Fed's last forecast indicated two rate cuts for 2025, but current market conditions and tariff uncertainties may push those cuts further away. Goldman suggests the Fed might still indicate two cuts to avoid increasing market volatility. Market expectations are shifting, with futures indicating a 50-50 chance of three cuts by year-end. The first cut is anticipated in June, while Fed Chair Jerome Powell has emphasized a careful approach in light of ongoing economic developments.