Well-known bank changes forecasts. Fed in focus
The Goldman Sachs Group withdrew its expectations of monetary easing by the Federal Reserve this year.
Economists point out that the better-than-expected U.S. labor market situation prompted them to shift their forecasts for interest rate cuts.
They now expect the Fed to cut rates by 25 basis points in June and December 2027, whereas previously it was assumed they would occur in December 2026 and March 2027.
The probability of this scenario was lowered from 40% to 30%.
The report was published after the Non‑Farm Payrolls data proved clearly better than expected.
Non‑farm employment rose in May by 172,000, while market consensus had expected an increase of 85,000.
At the same time, April data were revised upward from 115,000 to 179,000.
Private sector employment increased by 120,000, versus expectations of 85,000.
The previous month’s reading was adjusted from 123,000 to 177,000.
The unemployment rate, according to forecasts, remained at 4,3%.
The bank still rates rate hikes as unlikely, but raised the probability of a modest scenario from 10% to 20%.
“Long‑term Fed forecasts have remained fairly stable over the past year, and most participants still describe policy direction as moderately restrictive and anticipate further normalization after inflation falls,” the Goldman Sachs report said.
“A longer pause” in the monetary easing process, as analysts suggest, could reinforce the belief that rates are already at the “right level.”
The note also highlighted that strong investment demand linked to AI development could favor maintaining higher financing costs for a longer period, strengthening arguments for a cautious approach to cuts.
Source: Trading Economics.
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Dollar and euro rates on Monday, June 8
The dollar to zloty rate on Monday, June 8 is at 3,68 PLN.
Chart. Dollar to zloty (USD/PLN)
Source: Trading Economics.
The euro to dollar rate reaches 1,15 USD.
Chart. Euro to dollar (EUR/USD)
Source: Trading Economics.
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Source: Bloomberg.
