• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 days The United States produced more crude oil than any nation, at any time.
  • 10 days e-truck insanity
  • 9 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 5 days How Far Have We Really Gotten With Alternative Energy
  • 8 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 9 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 10 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)

Goldman Betting On Fed To Skip March Rate Hike

Speculation is growing among traders that the US Federal Reserve could refrain from hiking interest rates later this month for fear of triggering another Silicon Valley Bank-style collapse.

Turmoil in financial markets sparked by the tech-focused lender’s collapse has raised the likelihood Fed chair Jerome Powell and co may hold off raising rates any further.

Up until last week, investors had expected the world’s most influential central bank to return to steeper moves and increase rates 50 basis points higher on 22 March.

A batch of hotter than expected data over the last month or so indicated Americans were withstanding the Fed’s rates barrage reasonably well, which amplified a longer run risk of inflation staying above the central bank’s two percent target.

The federal open market committee (FOMC) has already lifted borrowing costs at the fastest pace since the 1980s, helping to bring inflation down from a more than nine percent peak last summer.

New inflation numbers out tomorrow are expected to show the rate of price increases to stay elevated at around six percent.

Although the series of hikes has helped tackle price pressures, it has sent yields up sharply, exposing fragility in the financial system.

Silicon Valley Bank collapsed as a result of a series of bets on interest rates staying lower, souring due to the Fed aggressively attacking inflation.

“In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22 (vs. our previous expectation of a 25bp hike),” Goldman Sachs said.

“We have left unchanged our expectation that the FOMC will deliver 25bp hikes in May, June, and July and now expect a 5.25-5.5 percent terminal rate, though we see considerable uncertainty about the path,” they added.

Lower peak rate expectations put downward pressure on the US dollar today, with the greenback weakening nearly one percent against a basket of comparable currencies, according to the Wall Street Journal’s dollar index.

Just last week, Powell in two testimonies at the US congress had told investors to price in a higher than previously forecast rate peak.


Investors are now betting the Fed will have to hold off from heaping more pressure on businesses and households to prevent unknown pressures in the financial system from flaring up again.

Similarly, markets trimmed their peak UK rate expectations and now reckon the Bank of England will opt for a final 25 basis point move on 23 March.

By City AM

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on March 14 2023 said:
    *"everyone fell asleep and once awoken came to forgetting what had been agreed to then read the new documents before thus realizing media now says already what agreed to then had a news conference featuring one of Western Civilization's greatest Opera Baritones and then the crowd roared with pleasure after which..

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News