Lates News

Goldman Sachs stated that, given the cooling of inflation in the U.S., market expectations for Federal Reserve interest rate hikes remain overly aggressive. Goldman Sachs Chief Economist Jan Hatzius wrote in a report that due to weak retail sales data, disappointing employment data, and a continuous slowdown in inflation data, the likelihood of the Federal Reserve raising rates at the September meeting is "extremely low." Hatzius wrote, "According to our core economic forecasts, the likelihood of further improvement in inflation data over time is greater than the likelihood of it worsening again. We still believe that the market's pricing of the federal funds rate is too hawkish." Data shows that the market has pushed back expectations for the next 25 basis point rate hike from the Federal Reserve to January next year, while just a week ago, the market fully expected a rate hike in December. Goldman Sachs believes that although market pricing is no longer as hawkish, there is still room for further easing of rate hike expectations.