Goldman Sachs said on Sunday that they no longer expect the Federal Reserve to raise interest rates at its March 22 meeting, with considerable uncertainty about the path forward, in light of recent tensions in the banking sector.
Goldman previously expected a 25 basis point hike in March.
U.S. regulators said Sunday that customers of the ill-fated Silicon Valley Bank will have access to all their deposits starting Monday, and regulators created a new mechanism for banks to access emergency funds. The Fed also made it easier for banks to borrow in an emergency.
Goldman analysts said they expect the measures taken by regulators to provide substantial liquidity to banks facing deposit outflows and improve confidence among depositors.
Goldman kept its expectations for increases of 25 basis points unchanged in May, June and July, but said it saw considerable uncertainty about the path of gains beyond March.
The bank said it now expects a terminal rate of 5.25%-5.5%.