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Goldman Strategists See Risk of ‘Growth Shock’ for Stocks

  • Higher rates to tame inflation may dampen economic activity
  • Markets not yet worried enough about growth outlook: HSBC
The Marriner S. Eccles Federal Reserve Board Building in Washington, D.C.

The Marriner S. Eccles Federal Reserve Board Building in Washington, D.C.

Photographer: Ting Shen/Bloomberg
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The risk to equities of a “growth shock” is increasing, according to Goldman Sachs Group Inc. strategists.

Ahead of a Federal Reserve meeting this week that’s expected to point toward a rate hike in March, the strategists warned that sharp monetary tightening to tame inflation could eventually have knock-on effects on economic activity, hurting stocks. Meanwhile, the International Monetary Fund cut its world economic growth forecast for 2022, citing weaker prospects for the U.S. and China along with persistent inflation.