Tuesday , December 1 2020

Goldman Sachs and JPMorgan are still expected to hike five Fed before 2020

The unemployment rate decreased to 3.3% and Fed's inflation rate increased to 2.3%.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. expects the Federal Reserve Bank to increase its interest rates five-fold by the end of 2019, even in the midst of financial turmoil.

In the reports published in the last 24 hours when the Standard & Poor's 500 index has come to a correction, economists of Wall Street giants predicted that Fed President Jerome Powell and his colleagues would increase interest rates. In December, the reference again reached 3.50 percent at the end of next year.

"Central banks will now make more financial tightening than expected in the markets," wrote Bruce Kasman-led JPMorgan economists.

The unemployment rate will drop to 3.3% and an increase in the inflation rate preferred by the Fed up to 2.3% will increase the benchmark rate from the current level of Fed to 2 percent. . They said 2.25 percent.

Jan Hatzius' team in Goldman Sachs said that there was a 90% chance of an increase in December and that the risks associated with the four increases in 2019 were z broadly balanced Gold.

While acknowledging that shares have been sold lately, Goldman Sachs economists have said that reviewing declines in the market since 1994 has been arguing that the Fed only blends with other indicators of financial conditions, which are significantly deteriorating, or that economic growth is declining. long-term trend.

"Although credit margins have recently been slightly enlarged, growth is still above potential," Goldman Sachs said. Said.

Investors are more skeptical about whether the Fed will be so aggressive. Morgan Stanley economists predicted only two increases in 2019 after the rise in December. The Bloomberg Economy is expecting three increases next year.


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