Federal Reserve Raises Interest Rate Projections
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 01 2026
0mins
Source: NASDAQ.COM
- Rising Rate Expectations: In June, the Federal Reserve updated its economic projections, indicating at least one interest rate increase in 2026, marking the beginning of the fifth rate-increase cycle since 1999, which could lead to increased market volatility, particularly given the current high valuations.
- Market Performance vs. Rates: The S&P 500 and Nasdaq Composite have risen 20% and 27% over the past year, respectively, but as interest rates rise, the attractiveness of equities diminishes, potentially pushing the market into correction territory, especially following Fed rate hikes.
- Historical Data Warning: Historically, the four rate-increase cycles since 1999 have coincided with corrections in the S&P 500 and Nasdaq, with data showing average declines of 10% and 15% respectively within three months of the first rate hike, prompting investors to remain cautious.
- Inflation and Market Volatility: While Morgan Stanley economists suggest the Fed may hold rates steady through 2026, the persistence of high inflation increases the likelihood of rate hikes, necessitating investor preparedness for volatility, particularly in light of current elevated market valuations.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 1055.290
Low
604.00
Averages
951.45
High
1100
Current: 1055.290
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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