Federal Reserve Unlikely to Ease Policy Based on Soft Data, Economists Say

According to Odaily, recent surveys of U.S. consumers and businesses indicate a sense of economic anxiety, though fundamental data does not yet show a significant slowdown. Economists at Goldman Sachs suggest that the Federal Reserve is unlikely to ease its policy based solely on 'soft data.' This caution is due to past instances where such data inaccurately predicted an impending recession, such as during the Fed's efforts to combat inflation in 2022. The Goldman Sachs team notes that the Federal Reserve would prefer to see evidence from the labor market and other hard data before considering a rate cut. Like other Wall Street institutions, the investment bank anticipates that the Federal Reserve will maintain its current interest rates in the upcoming decision on Wednesday.