Goldman Sachs: The Federal Reserve will wait for more definite fiscal policy changes

Goldman Sachs predicts that the Federal Reserve will not provide much guidance on the plans for its upcoming meeting. The potential fiscal policy changes after the U.S. election are another source of risk to the Fed's policy path, although this risk may persist for a longer time. Powell's comments at a press conference in July indicated that FOMC would be reluctant to respond to possible policy changes as they remain speculative. Even after the election results are announced, the committee may prefer to wait for more definite policy changes before reconsidering their economic outlook and interest rate plans. It is expected that there will be no significant modifications in today's Fed’s policy statement and it will cut interest rates by 25 basis points in December, reducing them by 100 basis points to 3.25-3.50% in the first half of 2025, but next year's pace and endpoint of cuts are uncertain.