Goldman Sachs stated that it continued to expect three additional rate hikes in 2023, bringing the U.S. Federal Reserve’s terminal rate to the range of 5-5.25%, up by half a percentage point from its last projection.
Even if the Fed is finally able to bring down, the global economy still faces the possibility of recession after a series of rate hikes by central banks around the world. Meanwhile, the housing industry and other businesses relying on low interest rates have begun to show weakness.
Some investors continued to make moves in anticipation of Fed’s rate cuts in 2023, even though, in his latest comment, Fed’s chairman Jerome Powell insisted on the plan to hold rates at a high level for some time to ensure that inflation has been brought down completely.
The Fed will begin its final two-day policy meeting for 2022 today, which will be the same day that the U.S. government will release inflation data for November. The market widely expected the U.S. central bank to increase interest rate by 50 bps.
