Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Goldman Sachs continues to agree with Fed on 3 rate hikes this year

Economy Feb 07, 2017 07:27AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Goldman notes that employment report dampened odds for a Fed rate hike in March

Investing.com – Though Goldman Sachs continued to be upbeat on the American economy in 2017 and reiterated their expectations that the Federal Reserve (Fed) will hike rates three times this year, they admitted that some of the weakness seen Friday’s employment report reduced the odds for a first move to come in March.

The median forecast from the Fed last December called for three rate increases this year, though markets have been more skeptical, pricing in only two moves.

Goldman Sachs chief economist Jan Hatzius said that January’s employment report, released on Friday, was “generally encouraging” and suggested that the U.S. was entering 2017 with “good amount of momentum” that made him believe that this year would be stronger than 2016.

Hatzius noted that Goldman was expecting growth to rise to 2.25% in 2017 from the prior year’s 1.5%.

On that note, Hatzius stated that “the jobs report was a little mixed as far as implications for the Fed are concerned.”

He noted the upticks in the jobless rate and the broader underemployment rate, known as U6, coupled with the wage increases coming below expectations.

“All of that says to us that a March hike has become less likely,” Hatzius said, noting that Goldman had reduced the odds for policy tightening at the next meeting to 15%.

However, Hatzius indicated that the cumulative probability of a rate hike by the June meeting was still 80% and they still expect three moves in June, September and December.

According to Investing.com's Fed Rate Monitor Tool, Fed fund futures price in a March move at a probability of only 9%.

Markets appear to broadly agree with Goldman, placing the odds of a move at the June meeting at roughly 63%.

However, the chance for a second rate hike does not pass the 50% threshold until the December meeting with the odds for three moves by the end of 2017 at only 31%.

Goldman Sachs continues to agree with Fed on 3 rate hikes this year
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Golden Nugget
Golden Nugget Feb 07, 2017 8:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks, I needed some humor today. 3 rate hikes lol.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email