Fed Rate Hikes May Be Near End, Goldman Sachs Predicts One More Hike

Goldman Sachs' chief economist Jan Hatzius believes that the Federal Reserve is nearing the end of its interest rate hikes. This comes after recent data showed a slower pace of hiring and softer underlying monthly inflation readings.

The September jobs report revealed only 29,000 new hires, below expectations of around 90,000. Unemployment also rose to 4.2%, and average hourly earnings increased by just 0.1% for the month.

While inflation remains above target, Hatzius argues that if monthly readings continue at a pace of 0.2%, it could remove the need for further tightening altogether.

Goldman Sachs now expects only one more quarter-point Fed hike in December and says even this move could disappear if inflation keeps cooling. Other major banks, such as JPMorgan, are also close to Hatzius' view, expecting just one more hike before the Fed stops.