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Goldman Sachs discusses its expectations for the FOMC policy decision on Wednesday.
"Since the FOMC last met in December, incoming data on wage growth and inflation have been encouraging, while signals on activity growth have been mixed and at times concerning. This ended up making the case for slowing the pace of rate hikes to 25bp this week quite easy," GS notes.
"The key question for the February meeting is what the FOMC will signal about further hikes this year. We expect two additional 25bp hikes in March and May, but fewer might be needed if weak business confidence depresses hiring and investment, or more might be needed if the economy reaccelerates as the impact of past policy tightening fades," GS adds.
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Statement due at 2pm New York time, Chair Powell's presser follows a half hour later.
Earlier previews:
- FOMC to hike 25 bps on Wed and Powell to stick to 5.1% peak - Barclays
- BoA on the FOMC, +25bp & guidance of more to come. BoA forecast EUR/USD lower.
- Goldman Sachs Fed view: balance of risks toward further tightening, not cuts later in 2023
- Fed to hike 25bps; the bar is high to flip the status quo for USD - TD
- WSJ's Timiraos says Federal Reserve officials uneasy that inflation could re accelerate
- Goldman Sachs doesn't want to fight the Fed
- Another week of central bank bonanza coming up
- What's priced in for the central bank meetings
