Goldman Sachs expects no further Fed interest rate hikes this year

Goldman Sachs believes the Federal Reserve is done raising interest rates this year, even if tomorrow’s monetary policy meeting hinted at the possibility of another rate hike.

“On November, we think that further labor market rebalancing, better news on inflation, and the likely upcoming Q4 growth pothole will convince more participants that the FOMC (Federal Open Market Committee) can forgo a final hike this year, as we think it ultimately will,” Chief Economist at Goldman Sachs Jan Hatzius wrote in a note issued last weekend.

However, the Fed's "dot plot", which reflects policymakers' interest rate projections and will be updated on Sept. 20, is likely to show "a narrow 10-9 majority still penciling in one more hike, if only to preserve flexibility for now," he added.

Markets widely anticipate that the US central bank will keep interest rates unchanged at this month’s meeting, which begins today and ends tomorrow.