Fed Preview: Signal about future rate hikes hold the key – Goldman Sachs
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Economists at Goldman Sachs provide a sneak peek at what they expect from the upcoming February US Federal Reserve (Fed) monetary policy decision.
“Since the FOMC last met in December, incoming data on wage growth and inflation have been encouraging, while signals on activity growth have been mixed and at times concerning. This ended up making the case for slowing the pace of rate hikes to 25bp this week quite easy.”
“The key question for the February meeting is what the FOMC will signal about further hikes this year. We expect two additional 25bp hikes in March and May, but fewer might be needed if weak business confidence depresses hiring and investment, or more might be needed if the economy reaccelerates as the impact of past policy tightening fades.”
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