Thu, May 23, 2024

Goldman Sachs and U.S. economy

Investment bank and local economy

Goldman Sachs Group Inc. is one of the leading investment banks. Recently it sent a letter to its clients. A new Goldman Sachs economics research note help to learn more about the topics which will affect the U.S. economy in 2020.

According to this note, clients should not expect new fiscal stimulus in the new year. Moreover, even the upcoming U.S. presidential election won’t change the situation.

Additionally, the investment bank does not expect that U.S. Federal Reserve will reduce the interest rates again in 2020. It is important to mention that in 2019, the Federal Reserve made the decision to cut the rates three times. As a reminder, last time when the Fed reduced the rates was in October.

The economics research note underlined why it is unlikely that the Fed will change this decision. Federal Reserve officials reached a consensus that monetary policy is in a good place. As a result, there is no need to change interest rates in 2020.

Goldman Sachs and other factorsFiscal stimulus in 2020

This note contains additional interesting information as well. For example, according to Goldman Sachs, Federal Reserve will complete its framework review. The investment bank anticipates the FOMC will adopt an inflation target above 2% for expansions.

Hopefully, the bank does not expect the recession in 2020. Based on this data, there is a less than 20% chance of recession. The Goldman Sachs pointed to a private sector that continues to run a financial surplus.

Moreover, the unemployment level is also expected to fell below 3.25%. Thus, the unemployment level will fall to the lowest point since the Korean War. Furthermore, the bank anticipates the wage growth will continue to increase in 2020.

Also, Goldman Sachs said it does not expect any U.S. officials to increase the tariffs on Chinese products due to the upcoming election. Moreover, as trade tensions between the U.S. and China continue to decline, this should help to stabilize the economy.

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