Goldman Sachs Predicts Single Final Federal Reserve Rate Hike
Goldman Sachs economists forecast one remaining interest rate hike, suggesting limited tightening could boost equities based on historical trends from 1997 and 2015.
Economists at Goldman Sachs predict the Federal Reserve System will implement only one more interest rate hike in the current cycle. This forecast diverges from broader market expectations, which currently price in three additional increases.
Macro strategist Vickie Chang noted that either outcome would mark one of the smallest rate-hiking cycles since 1983. Chang compared the current environment to limited tightening periods in 1997, 2015, and 1999-2000, suggesting that such a trajectory could be positive for equities. Historical data indicates the S&P 500 rose 34% in the year following the 1997 hike and 9% after the 2015 hike.
Chang observed that the current investment boom shares features with the 1999 period, though she stated that the macro imbalances present during that era are generally less visible now.
