Goldman Sachs economists predicted that the US Federal Reserve (Fed) will raise interest rates in July 2022. Previous forecasts of corporate economists were that the Fed would raise interest rates in 2023.
The course of inflation in the USA causes revisions in the expectations of institutions regarding monetary policy.
Goldman Sachs economists predicted that the Fed will raise rates in July 2022 due to inflation. The previous expectation of Goldman Sachs economists was that interest rates would increase in 2023.
In a note to customers, Institutional economists stated that the Fed will increase the policy rate after the end of the program to reduce asset purchases.
While economists predicted November 2022 for the second rate hike, they pointed out that two more rate hikes from the Fed are likely within a year following these rate hikes.
Powell’s Latest Inflation Comment Drew Attention
Fed Chairman Jerome Powell, who previously stated that inflation is temporary, changed his tone regarding inflation in his statement last week.
Fed Chairman Jerome Powell voiced his concerns about stubbornly high inflation in a higher tone, saying that the central bank will begin to reduce its bond purchases soon but will continue to be patient with interest rate hikes.
US Treasury Secretary Janet Yellen said she expects price increases to remain high through the first half of 2022 but does not accept criticism that the US is at risk of losing inflation control.