Investment Bank Goldman Sachs; Too Early for 'Dovish' Fed

Analysts at US investment bank Goldman Sachs said that the economic outlook has not yet deteriorated enough for the Fed to return to dovish policies. Experts added that the downside risk for stocks remains high.

Analysts at Goldman Sachs, a financial services provider, underlined that it is "too early" to price in a dovish turn in the US Federal Reserve's policy, as the economic outlook is not yet bad enough and interest rate markets remain very volatile. "We stand against markets pricing in a dovish Fed" "With gasoline prices rising, and until a broader set of macro data shows more tangible weakness in the economy, we are again pricing in markets generally pricing in a dovish Fed," the strategists said. Speculation that the Fed would adopt a policy more favorable to equities has led the S&P 500 Index to rally from time to time over the past 12 months, but all rallies have ended in a sell-off as indicators have hit a new low each time. The US Federal Reserve is considered to be on track for a fourth consecutive 75 basis point rate hike at its November meeting. For the second time in less than two weeks, the US stock gauge is already down 24 percent this year, while it is a few points above closing at its lowest level since November 2020. Goldman strategists noted that tightening financial conditions, rising geopolitical risks and the current growth and inflation duo raise the downside risk for stocks. 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!