NEW YORK (Reuters) – The Federal Reserve’s future moves on interest rates in 2025 will be in a narrow range unless the trajectory of inflation changes, Goldman Sachs CEO David Solomon said in comments posted on the firm’s website on Wednesday.
“Unless we get some policy action that really changes the trajectory of inflation, I think we’ll be in a narrow band with the policy rate,” Solomon said on the firm’s podcast.
The U.S. central bank held interest rates steady on Wednesday, and Federal Reserve Chair Jerome Powell said there would be no rush to cut them again until inflation and jobs data made it appropriate.
Solomon said durable goods have been soft in terms of the inflation rate, but services and now food are big headwinds.
“Those things ultimately matter and filter through into the economy,” he said. “As you look out through 2025 I think the range of outcomes is a pretty narrow position on policy.”
Solomon also said he expects a meaningfully improved environment for capital markets activity in 2025, with deals involving private equity firms likely to increase.Goldman Sachs beat Wall Street estimates for fourth-quarter earnings with its biggest quarterly profit in more than three years, as its investment bankers brought in more deal fees and its traders benefited from active markets.
(Reporting by Saeed Azhar; Editing by Sonali Paul)
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