Goldman sachs expects the Fed to raise interest rates five times this year, after announcing in June that it would start shrinking its balance sheet

Goldman Sachs forecasts the Federal Reserve will raise interest rates five times in 2022, up from four previously, and expects the move to begin in March, according to a research note by analysts late on Friday.Goldman Sachs analysts David Mericle and Jan Hatzius said in a report that they expect the Fed to raise rates in March and May, announce the start of shrinking its balance sheet in June, and then follow up in July and September.They then expect the Fed to resume a quarterly pace of rate increases in the fourth quarter and raise rates once in December, bringing rates to 1.25 percent to 1.5 percent by year-end.The analysts said they had raised their inflation path forecast after this week’s data and that “Fed Chairman Jerome Powell’s comments earlier this week made it clear that fed leadership is open to a more aggressive pace of tightening”.Goldman sachs said it still expects three rate hikes in 2023 and expects the Fed to reach a final rate of 2.5 percent to 2.75 percent in 2024.

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