BackGoldman analysts revoke Fed rate hike expectation in March after SVB failure
Goldman Sachs has revised its projections for the terminal rate of interest hikes, stating that it now expects the rate to be between 5.25% and 5.5%.
PremiumGoldman Sachs analysts have revised their prediction for the upcoming U.S. Federal Reserve meeting, stating that they no longer anticipate a rate hike on March 22. This shift in prediction is due to the recent stress experienced in the banking sector, which has led to considerable uncertainty about the future rate hike path beyond March.
According to Goldman Sachs' analysts, there is considerable uncertainty regarding the future path of interest rates beyond March, given the recent stress in the banking sector. As a result, they no longer expect the U.S. Federal Reserve to raise interest rates at its March 22 meeting.
According to media reports, previously, Goldman Sachs had anticipated that there would be a 25-basis-point hike in interest rates at the March meeting.
On Sunday, US regulators announced that customers of the failed Silicon Valley Bank (SIVB.O) would be able to access all their deposits from Monday onwards. Additionally, regulators have established a new facility allowing banks to access emergency funds. The Federal Reserve has also implemented measures to make it easier for banks to borrow from them during times of emergency.
According to analysts at Goldman Sachs, the measures taken by regulators, such as setting up a new facility to provide emergency funds and making it easier for banks to borrow from the Federal Reserve, are expected to provide significant liquidity to banks that are experiencing deposit outflows. Additionally, these measures are likely to improve the confidence of depositors in the banking system, which is essential for maintaining stability and preventing further outflows.
Goldman Sachs has maintained its previous expectations of 25-basis-point interest rate hikes in May, June, and July. However, the firm has acknowledged significant uncertainty regarding the path of interest rate hikes beyond the March meeting.
Goldman Sachs has revised its projections for the terminal rate of interest hikes, stating that it now expects the rate to be between 5.25% and 5.5%.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
