Goldman Sachs: the Fed will increase easing to eventually cut the federal funds rate by about 200 basis points

Goldman Sachs economist David Mericle said in a recent report, “We expect Powell to express more confidence in the inflation outlook and to emphasize the downside risks to the labor market more than he did in his post-July FOMC meeting press conference.” Goldman Sachs' expectations for the Fed's interest rate outlook are largely in line with the market: it expects the Fed to cut rates at each of its next three meetings and then increase easing, ultimately cutting the federal funds rate by about 200 basis points. The bank believes that Powell will preview this policy path in very general terms at the Jackson Hole meeting.