Goldman Sachs: Fed Unlikely to Hike in September, Market Pricing Still Hawkish

Goldman Sachs Chief Economist Jan Hatzius' latest assessment: A September Fed rate hike is "highly unlikely." Cooling consumption, near-stagnant employment trends, and sustained inflation improvement are converging on three fronts, fundamentally undermining the case for a hike. Market rate pricing remains hawkish, leaving room for downward adjustment. Goldman maintains its view of a steeper yield curve and new record highs for U.S. stocks by year-end. In Europe, the ECB may hike 25 basis points in September, but the next move is more likely to be a cut.