Goldman Sachs, the global investment bank, has revised its forecast for U.S. interest rates due to "stress in the banking system." According to reports, the bank no longer expects the Federal Reserve to raise interest rates at its Federal Open Market Committee (FOMC) meeting in March, following the central bank's announcement of measures to rescue depositors of failed banks, Silicon Valley Bank and Signature Bank.
The Federal Reserve's actions to rescue depositors of the failed banks included the release of $3.3 billion in reserves held by Circle, a cryptocurrency firm, at Silicon Valley Bank. The release of these funds, which was previously frozen due to the bank's collapse, is expected to make depositors whole again.
The revised interest rate forecast by Goldman Sachs comes as a result of concerns about the stability of the U.S. banking system. It remains to be seen how the Federal Reserve's actions will impact the broader financial landscape, particularly as the use of cryptocurrencies continues to increase.
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