(Reuters) - A sharp tightening of financial conditions convinced Goldman Sachs’ chief economist that the Federal Reserve is now more likely to pause its interest-rate hikes in March, before continuing with three more policy tightenings later in 2019.
Goldman had previously predicted four rate hikes, one more than median Fed forecasts from September - but far more than recent market expectations. “We think the probability of a move in March has now fallen to slightly below 50 percent,” Goldman’s Jan Hatzius wrote in a note. But “we see a return to quarterly hikes in June that last through the end of 2019.”
Reporting by Jonathan Spicer