Amidst growing inflation rates and high volatility in the economy of the United States of America, Goldman Sachs on Friday cut the GDP growth estimates of the North American country.
In a note which was released on Friday by Goldman Sachs, various renowned economists in the United States estimated that the gross domestic product growth in 2023 would be 1.1%.
Goldman Sachs had earlier posted a forecast of 1.5% growth in GDP of the United States.
The latest cut on GDP growth estimates comes amidst increasing concern of an additional hike in the benchmark interest rates by the Federal Reserve.
To control growing inflation in the US economy, the Federal Reserve of the United States has been aggressively increasing benchmark interest rates.
Federal Reserve consecutively hiked interest rates by 75 basis points in June and July 2022. The benchmark interest rates are currently posted at 2.25% – 2.50%.
Goldman Sachs predicts that US Federal Reserve will increase its interest rate by an additional 0.75% in the upcoming meeting of the monetary policy committee. The global investment bank also expects the interest rate to stand somewhere between 4% and 4.25% by the end of 2022.
Economists believe that the aggressive policies followed by the Federal Reserve regarding inflation control mechanisms might harm the domestic economy of the United States very badly.
US Federal Reserve chief Jerome Powell stated multiple times in the last few weeks that his team at the central bank would continue utilising any form of economical tools to bring the inflation rates under control.
Officials at the US Fed are trying to bring inflation rates under the desired level of 2%.
Economists also predict that level of employment in the US economy will be in worse condition as Economic output does not look very promising.
Both investors and economists have been focussing keenly on the interest rate hikes by the US Federal Reserve.
Capital markets in the USA are also highly volatile due to the aggressive interest rate policy being followed by US Federal Reserve. Over the past weeks, major indices in the USA suffered huge losses multiple times as Jerome Powell continued to propagate the idea of tightening monetary policy to bring inflation under control.