© Archyde.com. Goldman Sachs: The Fed will raise interest rates by 75 basis points during the first half
Goldman Sachs expected it to raise by a quarter of a percentage point at the March, May and June meetings in response to strong economic growth.
Jan Hatzius, the bank’s chief economist, said in an interview with Bloomberg on Tuesday that the recent growth data was stronger than expected, in addition to the January inflation data.
He added, “I don’t think that necessarily changes the trend towards lower inflation, but I do think it reinforces the idea that the Fed still has work to do.”
Therefore, Goldman Sachs analysts believe that the interest will increase by another 75 basis points, with no cuts until 2024, as Hatzius said: “This outcome seems to be more likely.”
When asked about the possibilities of the Federal Reserve returning to moving interest rates (up or down) by 50 basis points, Hatzios doubted that this would happen soon, but did not completely rule it out.
He added, “It would be a relatively significant move because if they move interest rates 50 basis points in March, the market will probably build a strong expectation of another 50 basis points, so you need a lot of information to push in that direction and I don’t think we’ve seen that.”