Goldman Sachs on the Fed vs. the ECB. Fed done hiking. One more to come from the ECB.

Goldman Sachs comments on the Federal Reserve vs. the European Central Bank.

summary is via the folks at eFX.

bank trade ideas, check
out eFX Plus
For a limited time, get a 7 day free trial, basic for $79 per month
and premium at $109 per month. Get
it here

Goldman Sachs anticipates the Fed’s hiking cycle to be complete, while one final hike from the ECB is in the forecast.

Key Points:

  • Fed’s Stance: Goldman believes that the Fed has wrapped up its cycle of rate hikes, with the intention of maintaining the current Fed funds rate range of 5.25-5.5% till 2024. The first rate reduction is anticipated in the second quarter of 2024, which is expected to proceed at a pace of 25bp per quarter. The projected stabilization for the Fed funds rate range is between 3-3.25%.
  • ECB’s Next Moves: For the European Central Bank, Goldman forecasts a final rate hike of 25 basis points in September, leading to a terminal rate of 4.00%. This expectation is grounded in the persistent services inflation observed in Europe. Post this hike, the ECB is predicted to stay on hold until the fourth quarter of 2024.

This article was written by Eamonn Sheridan at Source