Wednesday, June 6, 2007

This Makes it Official No Rate Cut This Year

From Goldman Sachs also said no rate cut in 2008 either. As stated in the post below the issue remains inflation and not employment, economic growth, or housing.

Goldman Sachs abandoned its forecast Tuesday for any interest rate cuts this year, adding that it sees none in 2008 either, citing tightness in the labor market and expectations for stronger economic growth.

Goldman's move comes a day after Merrill Lynch slashed its expectations for a rate cut this year, reducing its call for 2007 from 100 basis points of cuts to none. The firm cited its revised view on the Fed's persistent hawkish inflation stance and a recent string of stronger-than-expected data.

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