Goldman Sachs predicts that the Federal Reserve will cut interest rates twice this year in June and December, each by 25 basis points

ChainCatcher reports that the U.S. economy is at a "sweet spot," but markets may be overly pessimistic about the pace of Federal Reserve rate cuts. Goldman Sachs Chief Economist Jan Hatzius stated in a new report released on Monday that the key issue for monetary policy is how aggressively the Trump administration implements its import tariff agenda.

Goldman Sachs predicts that the Fed will cut rates by 25 basis points twice this year, in June and December, and again in 2026.

Jan Hatzius said: "But overall, risks to this forecast lean towards further easing. On one hand, even if economic performance is good, the Federal Open Market Committee (FOMC) might decide to cut interest rates before June; on the other hand, while it's unlikely for FOMC to make significant rate cuts under rapidly deteriorating economic data or risk sentiment conditions, it's far from impossible."