Goldman Sachs: The price of the September rate hike was hawkish, and the pressure on US stocks came from repeated interest rate expectations

Comparing news, Goldman Sachs chief economist Jan Hatzius believes in the latest opinion that the market's pricing of the September FOMC rate hike is still hawkish. The bank determined that unless there is a clear reversal in the August data released in early September, the possibility that the Federal Reserve will raise interest rates at the September 15-16 meeting is already very low. The reasons given by Goldman Sachs include: employment growth is clearly slowing down, consumption momentum is cooling down, and the inflation trend is more likely to continue improving.

From Goldman Sachs's perspective, recent data is weakening the reasons for interest rate hikes. Potential employment growth in the US in July is said to be only about 5,000 people, lower than the level needed to maintain the balance of the labor market; weak retail sales mean that consumption growth may slow to 1% to 1.5% in the second half of the year; core PCE inflation is still expected to gradually decline and approach the 2% target in 2027. Hatzius believes that after two consecutive months of weak employment and inflation data, the threshold for dovish commissioners to switch to supporting interest rate hikes will be high.

However, the minutes of the Federal Reserve meeting brought new disturbances to the market. The minutes of the July meeting released in the early morning of August 20, Beijing time showed that the number of officials supporting further tightening of the policy increased compared to June. Many officials believe that if inflation does not continue to cool down, higher interest rates may still be needed in the future. This makes it difficult for the market to directly bet on Goldman Sachs's interpretation of easing, and short-term interest rates and technology stock valuations will continue to be repeatedly affected by policy expectations.