Chart of the Week: A Hawkish Shift
Interest rate markets have shifted in a hawkish direction across the world, largely driven by the ongoing energy supply disruption. We believe that central banks may see through this supply shock, which is unlikely to produce a lasting inflationary impulse and may even start to weigh on consumer spending if it is not resolved soon. We consequently see opportunity at the front of the curve, particularly in the UK where the economic backdrop is weaker, while long-end yields might remain elevated, supported by fiscal concerns and an AI-led growth repricing.
Source: GS Global Banking & Markets and GS Asset Management. As of July 29, 2026. Chart shows market expectations for the cumulative change in the policy rate by the end of 2026 and 2027 for the Federal Reserve (Fed), Bank of England (BoE), and European Central Bank (ECB). “YE” refers to year-end. “Hawkish” refers to more restrictive monetary policy. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. 'We' refers to Goldman Sachs Asset Management. For Illustrative Purposes Only.
Download the full document, which includes the chart of the week and insights on market developments. On pages 3 and 4, we further recap equity sector, size and style returns, global index returns, as well as rates and spread movements and a monthly snapshot of global equity valuations.
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