Goldman Sachs predicts a halt in Fed’s interest rate hike

03/13/2023 02:43 • Crypto & Markets • 69 views

According to reports, Goldman Sachs said that in view of the recent pressure of the banking system, it no longer expected the Federal Reserve to raise interest rates at the meeting on March 22. The expectation that the Federal Reserve will raise interest rates by 25 basis points in May, June and July remains unchanged, and the terminal interest rate is now expected to be 5.25-5.5%. (Golden Ten)

Goldman Sachs: maintain the expectation that the Federal Reserve will raise interest rates by 25 basis points in May, June and July

Analysis based on this information:

Goldman Sachs has made an announcement regarding the interest rate hikes by the Federal Reserve. According to reports, the investment bank has stated that it no longer expects the central bank to raise interest rates in the meeting scheduled for March 22. This update comes in the backdrop of the recent market volatility and the pressure on the banking system.

The Federal Reserve, under the leadership of Jerome Powell, has been on a gradual interest rate hiking path since 2015. The monetary policy of the central bank has been supportive of the US economy, which has been growing at a steady pace over the years. The Fed has been raising interest rates as a measure to control inflation and maintain price stability in the country. However, recent developments in the global economy have put the brakes on the interest rate hike cycle.

Goldman Sachs’s revised outlook suggests that the recent volatility and uncertainty in the banking system have made it difficult to continue the anticipated interest rate hike. The expectation of a 25 basis points increase in May, June, and July remains unchanged, indicating that the Fed may pause for a brief period before resuming its cycle of interest rate hikes.

The terminal interest rate, which is the highest rate at which the Fed expects to achieve economic and monetary stability, is now pegged at 5.25-5.5%. This is lower than the rate projected by the Fed in the past, indicating that the bank may take a more cautious approach towards rate hikes in the future.

In conclusion, Goldman Sachs’s view on the Fed’s interest rate hikes is a reflection of the current state of the economy and the banking system. The prediction of a temporary halt in the interest rate hike cycle may provide some stability to the markets and ease the pressure on the banking system. However, the future of the economy and monetary policy remains uncertain, and it will be interesting to see how the Fed responds to the changing economic landscape.

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