---
title: "LIVE MARKETS-Goldman dims chances of Fed hikes despite oil jitters"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/281349563.md"
datetime: "2026-04-01T10:37:49.000Z"
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# LIVE MARKETS-Goldman dims chances of Fed hikes despite oil jitters

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### GOLDMAN DIMS CHANCES OF FED HIKES DESPITE OIL JITTERS

Traders have swung sharply from expecting two Federal Reserve rate cuts by year-end to flirting with the idea of hikes since fighting in the Middle East escalated, but Goldman Sachs is less convinced.

Oil prices have moved above $100 a barrel following the Iran conflict, prompting investors to reconsider their rate strategies amid heightened inflation risks.

Goldman however argues the current oil shock is smaller than past episodes and unlikely, on its own, to trigger tighter monetary policy.

“The Fed typically does not tighten in response to oil shocks alone,” Goldman said in a note. “We find no meaningful relationship between mentions of oil price shocks and tighter monetary policy in speeches by Fed officials.”

The bank said oil shocks tend to be temporary and weigh on demand, meaning rate hikes would risk damaging the labour market while doing little to curb inflation.

The Wall Street brokerage sees two quarter-point rate cuts by the Fed in September and December, similar to peers Morgan Stanley and UBS Global Wealth Management.

It added that inflation spillovers from higher oil prices are unlikely given cooling labour demand, subdued wage growth and anchored inflation expectations.

With monetary policy already restrictive, Goldman said a shock large enough to reignite inflation would more likely push the economy towards recession than prompt rate hikes.

“The FOMC is unlikely to hike,” it said.

(Kanchana Chakravarty)

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