Goldman Sachs on the US Economy – More Aggressive Fed, Higher Unemployment, Weaker Growth

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A Goldman Sachs note from Friday later (info via Reuters) has analysts at the bank making more pessimistic forecasts due to more aggressive tightening policy from the Federal Reserve through the rest of this year:

  • “the trajectory of higher rates combined with the recent tightening of financial conditions imply a somewhat worse outlook for growth and employment next year”

Goldman Sachs has revised its forecast for next week’s Federal Open Market Committee (FOMC) meeting. GS expects the FOMC to rise 75 basis points from 50 basis points previously.

  • sees an increase of 50 basis points in November
  • sees an increase of 50 basis points in December
  • sees the fed funds rate peak at 4-4.25% by the end of 2022

Economic forecasts:

  • sees GDP growth of 1.1% in 2023 (down from its previous peak of growth of 1.5% from the fourth quarter of 2022 to the end of 2023).
  • unemployment rate of 3.7% by the end of 2022 (from a prior call of 3.6%), to 4.1% by the end of 2023 (from 3.8%)

September, November and December dates below:

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