Goldman Sachs reiterates forecast for Fed funds to peak at 5.00-5.25%

It's not just the Fed that's fighting the market, Goldman Sachs economists are too.

"Our economists continue to expect three additional rate hikes of 25 basis points each in February, March and May, for a peak funds rate of 5-5.25%. We see the FOMC's overriding goal as continuing what it has successfully begun in 2022, maintaining a below-potential growth pace that steadily narrows the jobs-workers gap," they write.

The Fed funds futures Futures Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Read this Term market is pricing in a terminal top of 4.88% in May, which is a quarter-point less.

In terms of growth, Goldman sees the US economy expanding by 1.1% in 2023, which is well-above the 1.1% consensus. But Goldman Sachs itself highlights some of the risks as the firm is planning to lay off 8% of staff.

For the ECB, Goldman has boosted its terminal rate forecast to 3.50% from 2.75% late last week.