Goldman Says Markets Too Hawkish on Betting Fed Will Hike Rates

Goldman Sachs chief economist Jan Hatzius said market bets on Federal Reserve rate hikes remain too aggressive given cooling US inflation, softer retail sales and disappointing employment data. A rate hike at the September FOMC meeting is now very unlikely, with traders having pushed back expectations for the next quarter-point move to January from December. Goldman expects the US Treasury curve to steepen further, while long-end yields remain vulnerable due to heavy government borrowing and persistent fiscal concerns.