Fed Unlikely To Raise Rates In November: Goldman Sachs

Goldman Sachs strategists have suggested that the Federal Reserve is unlikely to raise interest rates at its meeting scheduled for October 31 to November 1.

CME's data indicated that there was approximately a 72% chance that the policy rate, currently in the range of 5.25%-5.50%, would remain unchanged at the October 31-November 1 gathering. I Photo: Board of Governors of the Federal Reserve System Facebook

They also anticipate that the US central bank will raise its economic growth projections when policymakers convene next week, as reported by Ira Iosebashvili for Reuters.

According to the investment bank's strategists, "In 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."

Goldman's strategists, however, expect the Fed's "dot plot," which reflects policymakers' interest rate projections and will be updated on Wednesday, to show "a narrow 10-9 majority still penciling in one more hike, if only to preserve flexibility for now."

As market participants seek to gauge the Fed's monetary policy direction, some major investors, including J.P. Morgan Asset Management and Janus Henderson Investors, have suggested that the central bank is likely done with rate hikes, following the most aggressive monetary policy tightening cycle in decades.

Futures tied to the Fed's benchmark overnight interest rate were indicating a 98% chance that the central bank would leave rates unchanged at the end of its meeting on September 19-20, according to CME Group's FedWatch Tool.

On Saturday, CME's data indicated that there was approximately a 72% chance that the policy rate, currently in the range of 5.25%-5.50%, would remain unchanged at the October 31-November 1 gathering.

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