Goldman Sachs: The Federal Reserve will not raise interest rates in September, and the market pricing remains hawkish.

Goldman Sachs Chief Economist Jan Hatzius' latest assessment: a Fed rate hike in September is "highly unlikely." The resonance of three factorscooling consumption, job trends nearing stagnation, and persistent improvement in inflationis fundamentally dismantling the rationale for rate hikes. Market interest rates still lean hawkish, but there remains room for downward adjustments. Goldman Sachs maintains its view that the yield curve will steepen and that U.S. stocks will reach new highs before the end of the year. In Europe, the European Central Bank may hike rates by 25 basis points in September, but the next step is more likely to be a cut.