JPMorgan, Goldman Sachs Shares Hit Record Highs as March Rate Hike Odds Surge

Shares of top investment banks Goldman Sachs and JPMorgan traded at record highs today, lifted by the President Trump’s address to Congress and increasing odds of an interest rate hike in March.

The CME FedWatch Tool estimates that the currently probability of a 75-100 bps rate hike has risen to 68.6%.

Rate hike odds were also boosted by NY Federal Reserve Bank William Dudley’s comments on Tuesday, "The case for monetary policy tightening has become a lot more compelling," Dudley told CNN.

Another Fed president, Robert Kaplan, echoed Dudley’s sentiments in an interview with CNBC on Tuesday, “I think we’re getting close to reaching our dual-mandate objectives and we should begin the process of removing accommodation.,” said Kaplan.

“We’re making good progress on our employment objective, we’re making good progress on inflation. My own forecast of 2017 is growth in excess of 2 percent.,” he added.

Yesterday, before Kaplan and Dudley’s interviews, the Fed Funds futures were indicating rate hike odds were around 35%.

Goldman shares (NYSE:GS) hit record highs today of $255.08 at 10:20 a.m. EST. But there wasn’t sufficient interest at $255.00 to keep the rally going. And by noon, GS shares slid below the opening price of $253.71, trading as low as $251.30 by 1:25 p.m.

JPMorgan’s share price (NYSE:JPM) held a little bit better than Goldman’s, opening 2.53% higher and trading to an all-time high of $93.80 by 12:40 p.m. EST. At 1:25 p.m., JPM shares were trading at $93.47 - about 0.61% higher than the opening price of $92.99.

JPMorgan building photo by Thomas Belknap