Fed: Data dilemma shouldn’t derail the outlook – Goldman Sachs

Data dilemma shouldn’t derail Fed outlook and another hike is extremely likely from the Fed today, according to the research team at Goldman Sachs.

Key Quotes

“However, recent data have sharpened the dilemma that inflation and employment are sending increasingly different signals about the urgency of further tightening. We don’t think the recent data call for a major change in the Fed’s policy outlook, as they have have broadly offsetting implications for the policy outlook in standard Taylor rules. The press conference should provide some clarity on whether the next tightening step after June will be balance sheet normalization – our expectation – or a third funds rate hike.”