Goldman Sachs are expecting the Federal Open Market Committee (FOMC)’s ‘Dot Polt’ to indicate that the majority on the Committee will indicate one more Fed Funds interest rate rise this year.
GS write that they expect
- “a narrow 10-9 majority still pencilling in one more
hike“
However, say the strategists, this will be:
- “if only to preserve flexibility for now“.
That is, to preserve the option of a November rate hike, not to indicate one is likely.
Goldman Sachs expects an on-hold funds decision at this week’s meeting (Wednesday 20 September, see screenshot below for timngs).
More, in summary from the note:
- FOMC is likely to upgrade its economic growth projections at this week’s meeting
- GDP estimate to 2.1% from 1% prior
- core inflation estimate CPI for 2023 to be lowered to 3.5%, from 3.9% previously
- jobless rate estimate for 2023 to be lowered to 3.9%, from 4.1% prior
- Fed is unlikely to raise interest rates at its Oct. 31-Nov. 1 meeting
- in “November, we think that further labor market rebalancing, better news on inflation, and the likely upcoming Q4 growth pothole will convince more participants that the FOMC can forgo a final hike this year, as we think it ultimately will,”
FOMC statement due on Wednesday 20 September at 1800 GMT, which is 2pm US Eastern time.