The US Federal Reserve will raise interest rates four times this year and will begin the process of reducing its financial balance in July, said economists at Goldman Sachs. The dollar near a new peak after the actions of the Fed
The US Investment Bank’s research department previously predicted that the Fed would raise federal stock interest rates in March, then in June and September, but now expects a fourth increase in December, raising interest rates by a total of 100 basis points. points (by 1%) compared to the current record low range of 0.00-0.25%.
The interest rate forecast by Goldman Sachs is only modestly above market expectations for 2022, “but the gap is growing significantly in the coming years,” investment bank economist Jan Hatzius wrote, BNR reported.
Traders and investors have raised their interest rate bets this year after the US Federal Reserve minutes released last week suggested earlier than expected interest rate hikes and the Fed’s ability to start cutting central bank holdings. securities for as much as 8.8 trillion. dollars earlier than many initially thought.
Goldman Sachs’ forecast is in line with market prices, which show a nearly 80% chance of the first post-pandemic interest rate hike in March and a nearly 50% chance of a fourth increase in December, according to the Chicago Board’s FedWatch Tool. CME. Federal fund futures traders even see an insignificant probability of 22.7% for a fifth increase in US interest rates this year. Banks raise fees from the New Year
Goldman Sachs already expects the Fed’s shrinking financial balance sheet to begin in July, earlier than the previous forecast for December, but the bank’s economists said that this process of selling assets purchased during the stimulus measures due to the Covid crisis could start even earlier. The president of the San Francisco Fed, Mary Daly, said on Friday that she could see the central bank shrink its balance sheet by more than $ 8 trillion soon after raising its key interest rates once or twice.
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