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 story : The Tell: Goldman Sachs says it’s too soon for markets to be trading ‘a full Fed pivot’ #FinanceUSA #StockMarketNEWS Spencer Platt/Getty ImagesJust ahead of Wednesday’s widely anticipated U.

@stockMarketNEWS Wed 10 Aug, 2022

Posted in: #FinanceUSA #StockMarketNEWS

The Tell: Goldman Sachs says it’s too soon for markets to be trading ‘a full Fed pivot’ #FinanceUSA #StockMarketNEWS
Spencer Platt/Getty ImagesJust ahead of Wednesday’s widely anticipated U. S. consumer price index report for July, a pair of Goldman Sachs analysts are warning that the U. S. ’s near-term inflation picture “is likely to remain uncomfortably high? and that financial markets are “more vulnerable? to upside surprises than before. The reason is that, for the past month or so, markets have been preoccupied with a scenario in which Federal Reserve policy makers can ultimately revert back to easier policy — or give up on aggressive rate hikes — on the presumption that inflation has peaked. That sentiment is reflected in nominal and real yields that have fallen nearly 100 basis and 85 basis points, respectively, from June to the start of August, analysts Dominic Wilson and Vickie Chang wrote in a note Monday. And it’s also demonstrated in Goldman Sachs’s own U. S. Financial Conditions Index, which has eased by 70 basis points from its peak, they said. Meanwhile, however, measures of inflation’s “breadth? have generally been rising and Goldman Sachs GS expects price gains to stay elevated in the next few months and likely through the end of the year. Indeed, some of the financial market’s brightest minds on inflation have been expecting a string of roughly 8. 8% annual headline CPI readings, starting on Wednesday, for the next three months — even after factoring in recent declines in gas and commodity prices. “Our central view has been that it is too early for the market to be trading a fullFed pivot,? Wilson and Chang wrote. In addition, “the market has worried too much about imminent recession,? and “the more the growth outlook improves, the more the Fed will need to make sure financial conditions stay tight.


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