Central Banks Forex Market Intelligence News

Goldman Sachs say the Fed could hike to 5% by March 2023 (GS raise rate call by 25bp)

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Adding to the hawkish Fed outlook already this morning from this:

A piece on the Federal Reserve outlook from Goldman Sachs via Bloomberg over the weekend.

GS are looking for 5% by March ’23. This is up 25 basis points from their previous forecast. GS project:

  • +75 basis points at the meeting this week (meeting is November 1 and 2)
  • +50 bp in December
  • +25 bbp in February
  • +25bp in March

GS cite 3 three reasons for hike beyond February:

  • “uncomfortably high” inflation
  • its necessary to slow the economy as fiscal tightening ends and price-adjusted incomes rise
  • avoiding a premature easing of financial conditions

Graph from the Fed, the Banks’s funds rate: