Why markets may be overpricing the number of Fed rate hikes

Rob Kaplan, Vice Chairman of Goldman Sachs and former President of the Federal Reserve Bank of Dallas, said on the Goldman Sachs Exchanges podcast that market pricing for the magnitude of Fed rate hikes may be overdone. He expects the Fed may raise rates once more to around 4%-4.25% before pausing, noting the current economy shows a divergence between booms in AI infrastructure and defense spending and pressure on interest-rate-sensitive sectors.