Goldman Sachs strategists expect the Federal Reserve to "stand pat" in 2026, contrary to market expectations of interest rate hikes
Matheus Dibo, Goldman Sachs' head of investment strategy for EMEA, stated on Bloomberg Television on Wednesday that while the market is currently still pricing in a 25 basis point rate hike in September (with a probability of about 50%), Goldman Sachs believes the Federal Reserve will keep interest rates unchanged throughout 2026. He noted that early-year inflation data was driven by one-off factors, there are limited signs of inflation spreading to broader areas, and the U.S. labor market is in equilibrium, not acting as a driver of inflation. Dibo acknowledged that if future inflation data were to surprise on the upside, the risk would lean towards a rate hike, but he maintained his baseline assessment.
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