Analysts at Goldman Sachs predict two Fed rate hikes next year, with steady valuations on the S&P 500 index.
Key quotes
“The futures market and our economists both expect the Fed will raise the funds rate by 25bp in July and at least one additional time later in 2022.”
“The median historical experience of equity valuations around initial Fed hikes shows stable P/E multiples.”
“Specifically, during the 12-month period starting six months before and ending six months after a tightening cycle begins, the valuation of the S&P 500 has remained remarkably steady on average.”
“Target S&P500 at 5,100 at end-2022.”
