Goldman Sachs said it expects three more Federal Reserve rate hikes this year, of 25 percentage points each, after US economic data released this week pointed to persistent inflation and resilience in the job market.
Producer prices rose to a seven-month high in January, data showed on Thursday, while a Labor Department report showed the number of Americans filing new jobless claims unexpectedly dropped. last week.
“In light of news of stronger growth and firmer inflation, we are adding a June high of 25 (basis points) to our Fed forecast, peaking at 5.25-5.5%,” said economists led by Jan Hatzius in a note dated Thursday.
Meanwhile, money markets are pricing in a terminal rate of 5.3% through July.
Following the recent US data, European investment bank UBS said it expects the US central bank to raise rates by 25 basis points at its March and May meetings, which could leave the rate in the 5% to 5% range. .25%.
“After that, we expect the FOMC (Federal Open Market Committee) to change and start cutting rates at its September meeting,” UBS wrote in a note to clients.
JPMorgan had, prior to the recent US data, forecast the terminal rate at 5.1% by the end of June, while BofA Global Research projected the range of 5-5.25% by the end of the year.
Most economists polled by Reuters ahead of the latest data said they expected the Fed to raise rates at least twice as high in coming months, with the risk of raising the estimate even further, although none of them were expecting a rate cut this year. year.
Source: CNN Brasil
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