Goldman, JPMorgan stick with forecasts of 4 Fed interest rate hikes in 2019

Goldman Sachs said markets 'overstated' the shift by Powell in part because the Fed's outlook for growth and preference for gradual rate hikes remains 'essentially intact'

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are sticking by their forecasts that the Federal Reserve will raise interest rates four times next year, while acknowledging that the risks to their outlook mounted this week.

Days after investors interpreted a speech by Fed Chairman Jerome Powell as signaling the potential for a 2019 pause in rate hikes, the economists acknowledged a shift in tone while noting robust growth, steady inflation and falling unemployment should keep the central bank tightening monetary policy through next year. An increase this month is all but guaranteed.

“Recent events have increased the downside