Federal Reserve terminal rate expected 5-5.25%, ECB 3.25% (Goldman Sachs forecast)

• “We expect the Fed to deliver 25bp hikes in March and May for a peak funds rate of 5.00-5.25%, although more hikes may be needed if the economy reaccelerates as the drag on growth from past policy tightening fades,” GS notes.
• “We expect the ECB to hike by 50bp in March before stepping down to a final 25bp hike in May for a terminal rate of 3.25%, given the sharp improvement in the outlook for headline inflation and diminished risks of strong second-round effects. On balance sheet policy, we expect the ECB to stop reinvestments completely after June, when the recently announced APP run-off of €15bn per month starting in March 2023 ends,” GS adds.

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Note the Goldman Sachs Federal Reserve caveat:

• more hikes may be needed if the economy reaccelerates as the drag on growth from past policy tightening fades

Seems a sensible thing to say.