Goldman Sachs on what's coming for interest rates

The debate around the neutral rate was ramped up by comments from Fed Governor Lael Brainard earlier this month. She advanced the idea that the short-term neutral rate was higher than the long-term rate, which the Fed pegs around 2.75-3.00%.

Goldman Sachs thinks markets need to reprice

"Many investors doubt that the FOMC will be comfortable taking the funds rate above its estimate of the 'neutral' level of 2.75-3.0%. We think this will be much less of a barrier than widely believed because most FOMC participants already see a restrictive stance as likely to be appropriate," economists led by Jan Hatzius wrote in a note.

Goldman doesn't extrapolate on the meaning but the market is already moving in the direction of higher Treasury yields. All else equal that will underpin the US dollar and could weigh on stock markets.

At the moment, the market is much more excited about global growth and that's weighing on the US dollar but so far it's a counter-trend move.