Market too hawkish on rates despite Iran war: Goldman Sachs

Goldman Sachs analysts argue that markets have overreacted to the hawkish Fed outlook triggered by rising oil prices and the war in Iran. While the probability of a rate hike by late 2026 reached 52% last Friday, Goldman suggests the "hawkish shock" is larger than historical norms justify. Most traders still expect rates to hold 3.5%-3.75% range in 2026.