Goldman Expects More Unconventional Easing, Cuts Growth Forecast (GS)

Economists at Goldman Sachs GS announced today a cut in economic growth forecasts, as well as another round of unconventional easing, perhaps another round of quantitative easing following a weak July jobs report. Chief economists Jan Hatzius and Ed McKelvey said they expect growth in GDP to grow at 1.5% annually in the second half of this year. But they now see a more gradual pick-up by the end of next year. The economists also cut their GDP forecast for 2011, cutting estimates from 2.5% down to 1.9%, mostly due to a reluctance from Congress to extend fiscal stimulus. Hatzius and McKelvey expect the Fed next week to announce a "baby step" to renewed unconventional easing when the Fed has its monetary policy meeting, which concludes Wednesday.