Weekly Report – March 8, 2023

Graph 2023.03.08

Highlight of the Week

Jerome Powell Says Data Will Determine Size of Next Rate Increase

  • Fed Chair Jerome Powell said the central bank will keep its options open about how much to raise interest rates this month.
  • Reports on hiring and inflation in February are expected to strongly influence the Fed’s decision.
  • Powell stated, “if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes”.
  • In January, hiring, spending, and inflation were stronger than expected leading many to believe that the February numbers will remain above expectations.
  • Many are anticipating a half-point increase after hearing Powell’s remarks.

Rate Curves

Graph 2023.03.08

Rapid Report:

Abelian Brand Mark

Goldman Sachs Aims to Shrink Consumer Segments

  • Goldman Sachs stock has fallen over 8% in the past month, while the overall S&P 500 Financials sector is down around 4.5%.
  • Their consumer platforms business includes its credit card partnership with Apple and General Motors as well as the home-improvement lender GreenSky which they acquired last year for $1.7 billion.
  • Marcus, Goldman’s consumer bank, is not included in what they call their “Platform Solutions” segment. However, Marcus has stopped making personal loans and could see further reductions in its offerings.
  • Under CEO David Solomon’s leadership there has been a push to consumer finance in order to smooth out the more volatile returns of its investment banking and trading divisions.
  • The chart highlights the $3.8 billion loss on a pretax basis that the Platform Solutions segment has incurred since the start of 2020. Goldman is aiming for 2025 to reach pretax break-even.
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