Goldman Sachs said it expects seven interest rate hikes by 25 basis points from the US Federal Reserve this year, up from five previously forecast and updated its forecast after US inflation data on Thursday, according to Reuters.
The consumer price index climbed to 7.5% last month on an annual basis, surpassing economists’ estimates by 7.3% and marking the largest annual increase in inflation in 40 years, further putting pressure on the Fed to raise interest rates. more aggressively.
HSBC economist Ryan Wang said the bank now expects the Fed to raise interest rates more than previously expected, raising 50 basis points in March and four additional one-quarter rate hikes. in 2022. According to HSBC, this will increase interest rates from the range 0-0.25% to 1.50-1.75%.
“This would be equivalent to 150 basis points in interest rate hikes this year, compared to our previous forecast of three interest rate hikes of 25 basis points,” Wang told customers.
Deutsche Bank said in a statement that its economists had also raised their forecast for the Fed to increase by 50 basis points. in March plus another five increases of 25 bp. in 2022, with an increase in all meetings except the November meeting and a total of 175 bp. in 2022.
Deutsche Bank economists “also point to the growing risk of recession in 2023 or 2024,” the note to customers said.
Source: Capital
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