Goldman Sachs: If the Federal Reserve does not move today, foreign exchange market will focus on the probability of future interest rate hikes

Before the Federal Reserve announced its interest rate decision, the US dollar index was flat; the outcome of this decision was abnormally uncertain. Goldman Sachs economists expect the Fed to hold back, but at least one vote against and in favor of raising interest rates. They said in a report that fluctuations in energy prices triggered by the war have cast a shadow on the outlook. Current market pricing shows that the probability of raising interest rates today is about 30%. Goldman Sachs said that if the Federal Reserve leaves interest rates unchanged today, the focus of the foreign exchange market will be on how much of the expectation of raising interest rates previously reflected in prices will be transferred to subsequent interest-rate meetings. Data from CME shows that investors have factored in expectations of a September rate hike into pricing.