revised<\/a><\/strong> outlook suggests that the central bank\u2019s terminal interest rate could settle between 3.00% and 3.25%, down from the earlier estimate of 3.50% to 3.75%. According to Goldman Sachs, a range of disinflationary forces\u2014including softer wage growth, weaker consumer demand in travel, and declining inflation expectations\u2014support this adjustment. Tariffs on Chinese goods, once feared to stoke consumer prices, have had a muted effect, further reinforcing the case for earlier monetary easing.<\/p>\nDisinflation Trends and Labor Market Cooling<\/h2>\n
Chief U.S. Economist David Mericle noted that the probability of a rate cut in September is now \u201ca little over 50%.\u201d He and his team project five cuts of 25 basis points spread across September, October, and December of this year, followed by additional reductions in March and June 2026. However, a July cut is considered unlikely.<\/p>\n
The report also flagged subtle signs of weakening in the labor market. While employment figures remain relatively strong, indicators suggest that it has become harder for job seekers to secure positions. Seasonal factors and recent shifts in immigration policy may also pose short-term downside risks for employment trends.<\/p>\n