Goldman Sachs predicted that the Fed’s policy rate will peak at 5 percent in March.
While global markets focus on the Fed’s interest rate decision, analyzes and forecasts for the tightening path continue to come from institutions.
Goldman Sachs, one of these institutions, predicted that the Fed will increase the policy rate to the range of 4.75-5 percent in March. With the latest analysis, Goldman Sachs economists raised their previous peak forecast by 25 basis points.
Economists predicted that there will be a 75 basis point hike this week in order to raise the policy rate to the highest level they predicted in March, and 50 basis points in December, 25 basis points in February and March each.
Goldman Sachs economists based the Fed’s expectations for rate hikes to go beyond February on three developments. According to economists, the Fed will not end interest rate hikes in February in order to avoid an immature relaxation in financial conditions and the need to cool the economy due to high inflation, the end of fiscal tightening and the rise in real incomes.