Goldman Sachs no longer sees a case for the Federal Reserve to deliver a rate hike at its meeting next week, citing "recent stress" in the financial sector.

Earlier Sunday, U.S. regulators announced measures to stem contagion fears following the collapse of Silicon Valley Bank. Regulators also closed Signature Bank, citing systemic risk.

"In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22," Goldman economist Jan Hatzius said in a Sunday note.

The firm had previously expected the Federal Reserve to hike rates by 25 basis points. Last month, the rate-setting Federal Open Market Committee boosted the federal funds rate by a quarter percentage point to a target range of 4.5% to 4.75%, the highest since October 2007.

Goldman Sachs economists said the package of relief measures announced Sunday stops short of similar moves made during the 2008 financial crisis. The Treasury designated SVB and Signature as systemic risks, while the Fed created a new Bank Term Funding Program to backstop institutions hit by market instability following the SVB failure.

"Both of these steps are likely to increase confidence among depositors, though they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008," they wrote.

"Given the actions announced today, we do not expect near-term actions in Congress to provide guarantees," the economists wrote, adding that they expect the latest measures to "provide substantial liquidity to banks facing deposit outflows."

Goldman Sachs added that they still expect to see 25 basis point hikes in May, June and July, reiterating their terminal rate expectation of 5.25% to 5.5%.

— CNBC's Michael Bloom, Jeff Cox contributed to this post