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Goldman no longer expects Fed to raise rates this month; futures surge

AuthorSenad Karaahmetovic
Published 03/13/2023, 01:45 AM
Updated 03/13/2023, 01:52 AM
© Reuters Goldman no longer expects Fed to raise rates this month; futures surge

By Senad Karaahmetovic

Futures are trading sharply higher in Monday's pre-open trading after U.S. regulators announced measures to tackle the consequences of the collapse of SVB Financial Group (NASDAQ:SIVB), which was closed due to systematic risks.

The Federal Deposit Insurance Corporation (FDIC) has moved in quickly to protect uninsured depositors in two bank resolutions - Silicon Valley Bank and Signature Bank (NASDAQ:SBNY). Moreover, the Fed and Treasury also announced the Bank Term Funding Program (BTFP), aimed at providing additional liquidity.

"We expect these measures to provide substantial liquidity to banks facing deposit outflows and to improve confidence among depositors," a Goldman Sachs economist wrote in a client note.

Given the most recent developments, Goldman Sachs no longer expects the Fed will increase rates at next week's meeting. The bank sees "considerable uncertainty about the path beyond March."

"We have left unchanged our expectation that the FOMC will deliver 25bp hikes in May, June, and July and now expect a 5.25-5.5% terminal rate, though we see considerable uncertainty about the path."

The S&P 500 futures are up 1.6% in pre-market trading while Nasdaq and Dow Jones futures are trading 1.7% and 1.15% higher, respectively.

 
 
 
 

Latest comments

Fed will increase next week.
Economists yet again showing the only reason they even have jobs in the first place is because the people they're advising to are even dumber than they are.
Providing money to cover deposits is not "printing" new money, it's maintaining existing money.
Where you think that 'provided' money comes from? They print it.
"a Goldman Sachs economist wrote in a client note." Why the anonymity? Please take a journalism class.
The Feds created this whole problem because of Covid 19. Pumped up the markets, handed out free monies, now it's time to take their money back by crashing the markets and treasury bonds. Net break even for them, investorrs big losses.
Given that the SVC mess was due to the Fed rate hikes, the pause is definitely required.
Are we Fed up and Brandoned out yet?
haha wait till the cpi prints above 6.2 .. and then the real drama starts ... people will forget svb in a month but not inflation. choose your positions carefully
😂They wont make it above 6.2 ;)
FED decided to fight inflation by printing money (Bail-outs are back !) and it would be fun to see how the Wells Fargo will go. But maybe after clients lost funds due to "glitch" they will still believe in Big heads cheaptalk so no bank run on WF...
BTFP.. Fabricated some new words.. So they didn't have to use the bailout word.. Just another bailout of all banks needing it.. Jerome needs to resign NOW!!!
I think the FED will raise 25bps at its next meeting, because it will want to show that it will not give in, under pressure, on its objectives of bringing inflation to 2%. A 50bps hike would be criminal and would create a lot of stress, I don't believe it. If the inflation numbers go down, I think there are only two more 25bps hikes to come before status quo and then pivot.
Just watch how inflation will start slowly crawling back higher, not down.
sachs and Powell are on the same team???
how convenient and simple method to manipulate feds monetary policy, by moving money around.
why don't you look at these Futures rise Goldman Sachs is just manipulating the market of course. they're wrong as much as they're right but you know woke liberal Financial experts
Goldman can make decision or FED ?
More Shenanigans
nema pojma
If another bank collapse then Goldman Sachs can no longer expect Feds to pause rates'?.....means the inflation and recession no longer exist?
High rates are putting banks in a bind. They have billions trapped in illiquid low rate bonds just like SVB. If they sell even a single bnd the entire portfolio grts marked to market realizing huge losses - again exactly what happened to SVB.
So pathetically weak
The perfect way to clean up liquidity up and down bringing tons of money to market makers, call this news “save the banks news” ar least for today 😀
Whoever thinks this market won't go any lower is crazy. (Yes, let's buy... it's lightning hard and very close but what the heck, what are our chances of getting fried right? 😆) thanks, I'll keep my puts...
American BS, this is the worst market manipulations I ever seen in 15 years of trading!
Four people have commented not counting myself and two have Lim as the last name. Kind of shady. Also shady because it sounds like the same person with more than one account.
This is the best reason to pause rate hike cpi data should be good .Bear will be busy covering their short tonight.
as if inflation has gone away. it hasn't.
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