Goldman Sachs Traders' Quick Take on Fed Rate Hikes: If Q4 inflation trends remain unchanged, the Federal Reserve may hike rates more than once.
Giulio Esposito of Goldman Sachs' fixed income and equities division noted that the Federal Reserve's 25 basis point rate hike on September 16 was more hawkish than Goldman Sachs had anticipated. Goldman Sachs believes that if inflation trends do not show a substantial change in the fourth quarter, the Federal Reserve may pursue a more aggressive front-loaded rate hike path than indicated by the current dot plot, rather than just one more hike. Federal Reserve Chairman Warsh explicitly characterized current financial conditions as "far from restrictive" at the press conference and took a strong stance on inflation, deeming it too high and persistent for too long.
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