Central Banks

Powell Is Not About to Go All Volcker on Rates at Jackson Hole, Goldman’s Hatzius Says

Economist sees scope for slowing pace of rate increases
But anticipates Fed funds rate of 3.5% to break inflation

Goldman Sachs Chief Economist Jan Hatzius previews Federal Reserve Chair Jerome Powell’s Jackson Hole speech, the path of US inflation, and the Fed’s terminal interest-rate target strategy on “Bloomberg Surveillance.”Source: Bloomberg

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By John McCorry and Jonathan Ferro

August 23, 2022 at 4:52 PM UTC

Corrected

August 23, 2022 at 6:32 PM UTC

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The message from markets this past week has been that Federal Reserve Chairman Jerome Powell will channel his inner Paul Volcker and deliver the fire and brimstone of large, inflation-crushing interest-rate increases in remarks at Jackson Hole on Friday.

Not so fast, says Goldman Sachs Group Inc. Chief Economist Jan Hatzius.