Goldman Sachs Now Expects No Rate Hike in March Due to Stress in US Banking System

Goldman Sachs has revised its U.S. involvement complaint forecast owed to “stress successful the banking system.” The planetary concern slope nary longer expects the Federal Reserve to rise involvement rates astatine its Federal Open Market Committee (FOMC) gathering successful March aft the cardinal slope announced measures to rescue depositors of failed Silicon Valley Bank and Signature Bank.

Goldman Sachs Revises Rate Hike Forecast

Global concern slope Goldman Sachs has revised its involvement complaint hike prediction for the upcoming Federal Open Market Committee (FOMC) gathering successful March. In a enactment to clients connected Sunday, the bank’s economists, led by its main economist Jan Hatzius, detailed:

In airy of the accent successful the banking system, we nary longer expect the FOMC to present a complaint hike astatine its adjacent gathering connected March 22.

Last month, the FOMC accrued the national funds complaint by 25 ground points to a people scope of 4.5% to 4.75%, the highest since October 2007.

Goldman revised its forecast soon aft the Treasury Department, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) announced rescue measures for depositors of 2 failed banks. Regulators unopen down Silicon Valley Bank connected Friday and Signature Bank connected Sunday. In addition, the Federal Reserve Board said Sunday that further backing volition beryllium made disposable to eligible depository institutions.

Commenting connected the Treasury Department’s determination to designate failed Silicon Valley Bank and Signature Bank arsenic systemic risks and the Federal Reserve’s constitution of a caller Bank Term Funding Program to enactment institutions affected by consequent marketplace instability, the Goldman Sachs economists explained:

Both of these steps are apt to summation assurance among depositors, though they halt abbreviated of an FDIC warrant of uninsured accounts arsenic was implemented successful 2008.

The economists further noted that they inactive expect the Fed to rise involvement rates by 25 ground points successful May, June, and July, with a terminal complaint anticipation of 5.25% to 5.5%.

Do you deliberation the Fed volition rise involvement rates astatine its March gathering adjacent week? Let america cognize successful the comments conception below.

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