Federal Reserve FOMC meeting this week - Goldman Sachs preview: 'Signaling a June Pause'

In summary from a Goldman Sachs note previewing the May 2023 Federal Open Market Committee (FOMC) meeting.

• The FOMC is likely to deliver a widely expected 25bp rate hike to 5.00 - 5.25% at its May meeting, but the focus will be on revisions to the forward guidance in its statement.
• We expect the Committee to signal that it anticipates pausing in June, but retains a hawkish bias, stopping earlier than it initially envisioned because bank stress is likely to cause a tightening of credit.

Goldman Sachs have been banging the drum on how US bank failures would tighten credit, diminishing, at the margin, further tightening from the Federal Reserve. This, for example, from back in mid-March:

• ICYMI: Goldman Sachs cut US GDP forecast citing the banking crisis impact on credit growth

Further from the note:

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The FOMC statement is due on May 3 at

• 1800 GMT
• which is 2pm US Eastern time