Goldman Sachs expect 4 Fed rate hikes this year

Goldman Sachs wait for the Federal Reservel raise interest rates four times this year and begin the process of reducing its balance sheet in July, joining other large banks in anticipating an aggressive tightening of US monetary policy.

The bank of Wall Street It previously estimated that the Fed would raise rates in March, June and September, but now expects another rise in credit costs in December.

The rate provided by Goldman Sachs it is only modestly above market expectations for 2022, “but the gap grows significantly in subsequent years,” the bank’s chief economist Jan Hatzius wrote in a note.

Fed officials said last month that the US labor market was “very tight” and that it might be necessary to raise rates earlier than expected, but also mentioned that it could reduce its overall asset holdings at a faster pace, from according to the minutes of his last monetary policy meeting last week.

This prompted traders to incorporate a roughly 80% probability of an interest rate hike from the Fed in March.

J.P.Morgan on Friday advanced its forecast of the first rate hike since the start of the pandemic to March, from the previous estimate that pointed to June, and now forecasts increases for each quarter of this year.

“We believe that the authorities of the Federal Reserve are coming to the same conclusion that the labor market is very tight, making it difficult to implement the first rate hike in June, as our previous forecast indicates, “wrote the bank’s chief economist, Michael Feroli, in a note sent to clients.