Goldman Sachs sees Fed rates peaking at 5% in March

Goldman Sachs Group Inc (NYSE:GS) economists said the U.S. Federal Reserve could raise interest rates by as much as 5% by March 2023, 25 basis points above their earlier forecast, Bloomberg News reported on Sunday.

Goldman Sachs Chief Executive David Solomon said last week that the US Federal Reserve could raise interest rates above 4.5-4.75% unless it sees "real changes in behavior". The Federal Reserve's next meeting could shed light on how far it will stick to aggressive monetary policies. Goldman's economists added that the path to a 5% hike includes 75 basis points this week, 50 basis points in December and 25 basis points in February and March. Goldman cited three reasons to expect the Fed to hike after February, the report said: "uncomfortably high" inflation, the need to cool the economy as fiscal tightening ends and price-adjusted incomes rise, and to avoid premature easing of financial conditions. The central bank is expected to raise rates by 75 basis points for the fourth straight time after its next policy meeting on November 1-2. Betting on a less hawkish Fed has been a dangerous venture this year. Stocks have repeatedly rebounded from lows on expectations of a so-called Fed pivot, only to be crushed again by fresh evidence of persistent inflation or a central bank determined to maintain the pace of rate hikes. Source: Reuters Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!