December 10, 2018 / 3:58 PM / 9 months ago

Goldman cuts 2019 Fed rate-hike forecast to three

The Goldman Sachs company logo is seen in the company's space on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 17, 2018. REUTERS/Brendan McDermid

(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

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