Goldman Sees the Fed Waiting on Inflation
Goldman Sachs expects the Fed to remove wording on how it remains "patient" about raising rates in Wednesday's policy statement, replacing it with something along the lines of how "it will soon be the case" that higher rates are warranted if the FOMC is "reasonably confident" that inflation will move back toward 2%. While that opens the door to a June rate hike, Goldman's expectation for another 20-basis-point decline in core inflation sets its liftoff estimate at September. A downward revision in the board's inflation outlook would show the Fed is not yet "reasonably confident," and also reassure market participants that tightening isn't imminent.