Goldman Sachs downplays expectations for a Fed rate hike this year

Goldman Sachs analysts noted in a report that market pricing in the US federal funds rate has fluctuated wildly since the outbreak of the Iraq War, but the likelihood of a rate hike this year remains low. Analysts stated that the current supply shock is smaller in scale and more limited than previous inflationary shocks, and oil price increases are less than in the 1970s. Furthermore, they believe that "the current economic starting point makes a widespread spillover of inflation less likely," and the current starting point of monetary policy also reduces the probability of a rate hike. Analysts emphasized: "The Fed typically does not tighten policy solely in response to oil shocks." (Jinshi)