The Federal Reserve could lift interest rates three times this year in a bid to curb inflation, according to Goldman Sachs' chief economist – and that could turn up the pressure on stocks. he expects the Fed to raise rates by 25 basis points at its March, May and June meetings. The US central bank may be worried the economy is on the verge of growing too hot, he said.
"It reinforces the idea that the Fed still has work to do. And so we think another 75 basis points from here, with no cuts until 2024, seemed like a more likely outcome."on an annualized basis in January. While price pressures have been moderating since mid-2022, the reading showed inflation still remains far above the Fed's 2% target.
The call by Hatzius — who also serves as head of global investment research at Goldman — marks a stark contrast to what markets expect of the Fed moving forward. Higher interest rates encourage saving over spending and make borrowing more expensive, which tends to alleviate upward pressure on prices. However, they can also sap demand, slowing economic growth and dragging down stocks and other assets.
Unless there is a nuclear war, then stocks will be worth nothing.
Stocks going to get rocked again this year
France Dernières Nouvelles, France Actualités
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