Goldman Sachs moves rate hike forecast to Dec from Sept
- Seven FOMC participants are now projecting zero or one rate hike this year, a group they believe includes Fed Chair Janet Yellen
- hike in Sept still possible if inflation is stronger or there is an easing in financial conditions
- risks surrounding Greece and its creditors may also be a reason to delay lift-off
- expects Fed to raise rates by 100 bps per year
- Fed funds to reach 1.25-1.5% by end-2016, 2.25-2.5% by end-2017
Client note out from chief economist Jan Hatzius and senior economist Zach Pandl.
They had "viewed a clear signal for a September hike at the June meeting as close to a necessary condition for the FOMC to actually hike in September, but the committee did not lay that groundwork" yesterday.
"Our new call moves our forecast for what the FOMC will do closer to our long-standing view of what the FOMC should do, in light of risk management considerations."
They say a Sept rate hike "could again become our baseline if we were to see much stronger-than-expected activity or inflation data over the next few months, a sharp easing of financial conditions, or a combination of the two."
