Goldman Sachs no longer expects Fed rate hike in June

Economists at Goldman Sachs (GS.N) no longer expect the U.S. Federal Reserve to raise interest rates in June, according to a research note published on Wednesday following data that showed consumer prices cooled faster than expected in March.

Goldman Sachs had previously expected consecutive rate hikes at the Fed’s May and June meetings. Economists led by Jan Hatzius said in the research note they still expect a rate hike in May.

Goldman’s latest prediction brings the investment bank into line with expectations of other investors. CME interest rates futures were little changed following Wednesday’s inflation report and continued to imply traders mostly expect a 25 basis point rate hike in May, no rate hike in June and a significant chance of a rate cut in July.

Goldman said the latest inflation data was in line with its expectations, and that its new forecast for no rate hike in June was driven by hints that banks are reining in lending following the recent collapse of Silicon Valley Bank.

This report’s information was first seen on REUTERS; to read more, click this link.