Goldman Sachs cuts its 2022 target by 16% for the S&P 500 According to Reuters

© Reuters. People wearing face masks, monitoring the outbreak of the coronavirus disease (COVID-19), are seen near an electronic board showing the Dow Jones and S&P 500 stock indexes, at the Lujiazui financial district in Shanghai, China National November 9, 2020. REUTERS / Aly Song / Photo File

(Reuters) -Goldman Sachs cut its end-of-2022 target for the benchmark by about 16% to 3,600 points, as the US Federal Reserve showed little sign of backing down from its aggressive stance on rate hikes.

Analysts at Goldman Sachs (NYSE:) wrote in a note late Thursday that the central bank’s expected interest rate path is now higher than its previous estimate. Their previous target was 4,300 points.

The benchmark index last closed at 3,758.

“Based on discussions with our clients, the majority of equity investors have accepted the view that a hard landing scenario is inevitable and that their focus is on timing, magnitude. and the timing of a potential recession and investment strategies for that,” wrote Goldman analyst David Kostin.

On Wednesday, the Fed indicated that global policymakers will “hold on” to their battle to reduce inflation, raising US interest rates by 75 basis points for the third time in a row and reporting Borrowing costs will continue to increase this year.

Kostin noted that inflation has proven to be more persistent than expected and is unlikely to show any clear signs of abating in the near-term, leading to even higher estimates of the Fed’s tightening.

US monthly consumer prices unexpectedly rose in August.

He added: “Most portfolio managers believe that to bring inflation down, the Fed will have to raise interest rates high enough to lead to a U.S. recession at some point in 2023.

Earlier this month, UBS cut its S&P 500 end of 2022 target to 4,000 points.

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