Goldman Sachs raised its rate hike expectation from the Fed to 7 from 5 this year due to the rise in inflation.
Goldman Sachs changed its interest rate expectations after the data showed that inflation climbed to 7.5 percent in the USA yesterday. Goldman Sachs economists led by Jan Hatzius predicted that the Fed will increase by 25 basis points at seven meetings.
Analysts stated that due to the high course of inflation and short-term inflation expectations, there might be a 50 basis point increase in interest rates in March. Still, the authorities gave a more gradual increase signal.
Yesterday, James Bullard stated that he would support a 100 basis point rate hike starting from July in response to inflation at its 40-year peak.
Global banks are also expecting aggressive rate hikes from the Fed. Deutsche Bank economists announced that they expect a 50 basis point rate hike in March after yesterday’s inflation data.
Economists expect an increase of 25 basis points at every meeting except November. Experts also emphasize that the cycle of interest rate hikes will threaten global economic recovery.