Goldman: Markets Overestimate Fed Rate Hikes

Goldman Sachs reports suggest that the markets are overestimating the likelihood of the U.S. Federal Reserve raising interest rates. This is because inflation indicators are declining, and employment and retail sales data are weak, reducing the chances of a rate hike at the upcoming September meeting. Traders have postponed their expectations of a rate increase to January instead of December, as bets on monetary tightening diminish. Meanwhile, long-term U.S. bond yields remain high due to the interplay between falling inflation and rising government borrowing costs. Institutions expect long-term yields to stay under pressure amid escalating economic challenges, while short-term interest rates may decline.

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