Goldman Says S&P 500 to Gain 18%, Sees ‘Decent’ Year for Bonds

Goldman Sachs Group Inc., Wall Street’s most profitable investment bank, predicts the Standard & Poor’s 500 Index will rally 18 percent to 1,500 by the end of December and Treasuries will have a “decent” year.

“We have a very out-of-consensus view for how much the economy can grow before this growth generates higher inflation and interest rates,” Jan Hatzius, the company’s New York-based chief U.S. economist, wrote in a report he distributed by e-mail today. “If we’re right, the likely implication is a decent environment for the Treasury bond market and a very good environment for the equity market.”