Tags: Goldman | Fed | rate | hike

Goldman: Strong Jobs Data Mean Fed Will Raise Rates Sooner

By    |   Monday, 07 Jul 2014 07:15 PM

Goldman Sachs economists have pushed up their forecast for the first Federal Reserve interest-rate hike to the third quarter of 2015, thanks partly to last Thursday's strong jobs report.

Goldman had previously forecast that the first rate increase would come in the first quarter of 2016. The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

Goldman adjusted its projection amid "the cumulative changes in the job market, inflation, and financial conditions over the past few months," the firm's chief economist Jan Hatzius wrote in a commentary obtained by MarketWatch.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

"We view this as an illustration of the substantial progress that the U.S. economy has made in overcoming the fallout from the housing and credit bubble."

On the jobs front, non-farm payrolls rose 288,000 in June, marking the fifth straight month that the gain totaled more than 200,000. That's the longest streak since 1999-2000. As for inflation, consumer prices rose 2.1 percent in the year through June.

Goldman predicts fed funds will gradually climb to 4 percent by 2018.

Other banks, including JPMorgan Chase and Bank of Tokyo-Mitsubishi UFJ, also have moved forward their rate-hike forecasts since the employment report.

"We might see more U.S. banks bringing forward their rate-hike expectations this week," Piet Lammens, head of research at KBC Bank in Brussels, told Bloomberg.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

Related Articles:

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
Goldman Sachs economists have pushed up their forecast for the first Federal Reserve interest-rate hike to the third quarter of 2015, thanks partly to last Thursday's strong jobs report.
Goldman, Fed, rate, hike
269
2014-15-07
Monday, 07 Jul 2014 07:15 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved