Goldman Sachs economists say the US central bank will raise interest rates four more times between now and 2023, keeping rates high until 2024. The two-day FOMC meeting starts Tuesday.
is unlikely to pivot and cut its benchmark interest rate until 2024 at the soonest as it tries to crush the hottest inflation in four decades, according to Goldman Sachs strategists.
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, May 4, 2022. Although Goldman economists, like many other experts, initially thought the Fed would reduce the size of rate increases after July, that changed after the August inflation data released last week came in hotter than expected. The consumer price index unexpectedly rose 0.1% in August from the previous month, dashing hopes for a slowdown. On an annual basis, prices are up 8.3% — near the highest level since 1981.
Permits for future construction, a good gauge of future housing activity, are anticipated to fall 4.5% to 1.610 million in August, the lowest since September . The Federal Reserve is widely expected to raise the Federal Funds rate by three-quarters of a percentage point to a range of 3%-3.25%, up from the current range of 2.25%-2.50%.
The Federal Reserve’s balance sheet currently stands just shy of $9 trillion, having doubled since the pandemic as the Fed bought trillions in Treasuries and mortgaged-backed securities to try and hold off an economic collapse. The central bank began winding down its balance sheet in June by allowing up to $47.5 billion per month to mature without reinvesting the proceeds. That figure has doubled as of last week.
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