Fed to pause at its March meeting – Goldman Sachs

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On the US Federal Reserve (Fed) rate hike decision, economists at Goldman Sachs noted, “we expect the FOMC to pause at its March meeting this week because of stress in the banking system.”

Also read: Federal Reserve: Expect no rate hike in March – Goldman Sachs

“While policymakers have responded aggressively to shore up the financial system, markets appear to be less than fully convinced that efforts to support small and midsize banks will prove sufficient.”

“ … a pause in the inflation fight, but that should not be such a problem. Bringing inflation back to 2% is a medium-term goal, which the FOMC expects to solve only gradually over the next two years. The FOMC can get back on track quickly if appropriate, and the banking stress could have disinflationary effects.”

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