Goldman Sachs has trimmed the odds of the U.S. Federal Reserve raising interest rates next week, noting the absence of a clear indication that the central bank's rate-setting group was set to tighten policy.
Goldman cut the subjective odds of an interest rate hike to 25 percent from 40 percent previously, while raising the odds that the next increase will come at the December meeting to 40 percent from 30 percent previously, the bank's economists led by Jan Hatzius said in a note.
The new assessment from Goldman came after Fed Governor Lael Brainard warned on Monday against moving too quickly on rate hikes. Her comments followed a flurry of Fed speakers who in recent days had offered divergent views on the outlook for monetary policy.
Brainard, a voting member of the Federal Open Market Committee (FOMC), was the last scheduled Fed speaker before next week's meeting, and some market participants had speculated that her speech could be used as an opportunity to prepare markets for an interest rate increase.
"The lack of a signal is meaningful because if action were likely, the committee would normally make an effort to nudge the market toward anticipating a hike," the Goldman Sachs economists said in the note.
Still, the economists noted they were reluctant to cut their subjective probabilities further given uncertainty over the FOMC's intentions.