The Federal Reserve is likely to only increase interest rates three times this year, skipping a hike at its March meeting, Goldman Sachs said, revising its previous forecast for four hikes.
Goldman believes that the Fed may not hike until June although it noted that rates could still be lifted in April if market conditions improve significantly.
"Incoming economic data continue to look broadly consistent with the committee's outlook, but financial conditions have tightened meaningfully," Goldman said in a note Wednesday. "Officials sound inclined to take more time to gather data and observe market developments."
But it noted that its forecast for three hikes is still above markets' pricing for just a 50 percent chance of a Fed hike this year and a 25 percent chance of a rate cut.