Goldman Sachs: Federal Reserve Will Avoid Providing Forward Guidance on Policy Actions in March

Goldman Sachs doesn't expect much new information from tomorrow's Fed January interest rate decision. The FOMC is likely to acknowledge signs of a stabilizing labor market in its statement, but is unlikely to provide forward guidance for policy action in March. The tariffs are expected to lead to a modest, one-off increase in inflation that the Fed is likely to ignore. Historically, Fed officials have played down the inflationary impact of tariffs and focused more on the potential GDP impact. Goldman Sachs expects two 25-basis point rate cuts in 2025, one in June and another in December, with another cut in 2026.