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Goldman Sachs cuts 2022 target for S&P 500 by 16%

People wearing masks, following the outbreak of the coronavirus disease (COVID-19), are seen near an electronic board displaying the Dow Jones and S&P 500 stock indices, in the Lujiazui financial district in Shanghai, China, 9 November 2020 REUTERS/Aly Song/File Photo

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Sept. 23 (Reuters) – Goldman Sachs has cut its year-end 2022 target for the benchmark S&P 500 (.SPX) index by about 16% to 3,600 points as the US Federal Reserve shows little sign of backing off takes off from his aggressive interest-walking stance.

Goldman Sachs analysts wrote in a note late Thursday that the central bank’s expected interest rate path is now higher than its previous estimate. Their previous goal was 4,300 points.

The benchmark index last closed at 3,758 points.

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“Based on our client discussions, a majority of equity investors believe that a hard landing scenario is inevitable and their focus is on the timing, magnitude and duration of a potential recession and investment strategies for that outlook,” Goldman analyst David wrote. . costin.

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The Fed said on Wednesday that global policymakers would “continue to push” inflation, and raised US interest rates by 75 basis points for the third time in a row and indicated that borrowing costs would continue to rise this year. read more

Kostin noted that inflation has proved more persistent than expected and is unlikely to show any clear signs of easing in the near term, leading to even higher estimates of Fed tightening.

Monthly consumer prices in the US had unexpectedly increased in August. read more

“Most portfolio managers believe that to keep inflation in check, the Fed will have to raise interest rates so high that it will lead to a recession in the US sometime in 2023,” he added.

Earlier this month, UBS lowered its year-end 2022 target for the S&P 500 to 4,000 points.

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Reporting by Aniruddha Ghosh in Bengaluru; Editing by Anil D’Silva and Krishna Chandra Eluri

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Our Standards: The Thomson Reuters Trust Principles.

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