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Two months ago, Goldman Sachs CEO David Solomon said the Federal Reserve was unlikely to cut rates at all in 2024.
Now he's predicting one or two cuts this fall as economic data becomes more promising.
"I've been more cautious about interest rate cuts all year than the general consensus," he told CNBC in a Tuesday interview. "When I now look at the data and the way things are setting up, I think the perspective of one or two cuts in the fall seems more likely."
Solomon's reversal comes as recent earnings reports show that consumers are adjusted their habits in response to inflation.
"There's no question there are some shifts in consumer behavior, and the cumulative impact of what's been kind of a long inflationary pressure, even though it's moderating, is having an effect on consumer habits," Solomon said.
He referenced McDonald's earnings report in particular, which showed that customers have grown weary from high prices driven by inflation. For McDonald's, that's slowed sales as low income customers pass on eating out.
But Solomon said he remains hesitant still to make any strong speculations on rate cuts as the trajectory of the economy remains unclear in the next twelve to eighteen months.
The current economic environment, though, "has been relatively benign," and will likely remain benign "unless there's some other shock as we finish up the year," he said.
Solomon added, too, that he doesn't expect rate cuts to change policy too much.
"Think about policy where policy is. Can you really say that one or two cuts creates a hugely different policy picture than where we are at the moment?" he said.