Goldman Sachs cuts 2023 US GDP forecasts to 1.1%

The influential financial firm now expects the Federal Reserve to hike policy rates.

It would 75 basis points at its meeting next week

50 basis points previously and sees 50 bp hikes in November and December, with the fed funds rate peaking at 4-4.25% by the end of the year

This higher rates path combined with recent tightening in financial conditions.

It  implies a somewhat worse outlook for growth and employment next year.

GS sees the unemployment rate at 3.7% by year-end, up from 3.6%, and rising to 4.1% by the end of 2023, from 3.8% previously.

Billionaire investor Ray Dalio predicts 20% decline in equity market if Fed hikes rates to 4.5%