Goldman Sachs economists led by Jan Hatzius, in a research note on Thursday, rasied their forecasts for the Fed’s tightening pace.
Key takeaways
“Now expect the Fed to hike by 75 basis points this month and 50 basis points in November, up from their previous forecasts of 50 basis points and 25 basis points respectively.”
“Fed officials have sounded hawkish recently and have seemed to imply that progress toward taming inflation has not been as uniform or as rapid as they would like.”
“The tighter policy will keep growth below potential in the second half of this year.”
“How the drag from tighter financial conditions will net out with other key growth impulses in 2023 is more uncertain, and we could imagine the hiking cycle extending beyond this year.”
