Goldman Sachs economist David Mericle reports that while Kevin Warsh is poised to become the new Fed chair, immediate changes in monetary policy are unlikely. Despite leadership shifts, the Federal Open Market Committee's divided stance may limit Warsh's ability to push for rapid rate cuts. Goldman Sachs maintains its forecast for a 25 basis point rate cut in both September and December, citing ongoing uncertainties in the Middle East.
In other developments, Goldman Sachs notes a resurgence in investor risk appetite to pre-Iran war levels, with significant stock market inflows and reduced volatility. Meanwhile, Aptus Capital Advisors highlights the limited significance of the Fed's April meeting, suggesting the June meeting will be more pivotal under Warsh's leadership. BNP Paribas warns of the long-term economic impacts of the Middle East conflict, forecasting lower global GDP growth and higher inflation.
Goldman Sachs Predicts Fed Rate Cuts Despite Leadership Change
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