2/2

© Reuters. FILE PHOTO: The Federal Reserve building is seen in Washington, U.S., on January 26, 2022. REUTERS/Joshua Roberts/File Photo

2/2

(Reuters) -Major investment banks have pencilled in a strong run of interest rate hikes for 2022 after hotter-than-expected inflation data ramped up pressure on the Federal Reserve to take a firmer stand against soaring prices.

Data on Thursday showed U.S. consumer prices rose at their fastest pace since the early 1980s, fuelling market speculation for a hefty 50-basis-point hike from the Fed’s March 15-16 meeting.

The current Fed fund effective target is 0-0.25%.

As the Fed gets set to raise pandemic-era rates, here are the estimates from major global investment banks on how far and fast rates will rise:

* Citi now expects 150 bps of tightening this year, starting with a 50 bps move in March, followed by four, quarter-point increases in May, June, September and December.

* Credit Suisse (SIX:) now expects the Fed to hike a cumulative 175 bps this year, beginning with a 50 bps increase at the upcoming March meeting.

* Societe Generale (OTC:) now expects five rate hikes of 25 bps this year, starting in March.

* Morgan Stanley (NYSE:) says 125 bps of policy tightening this year is “appropriate”, and will come in the form of four 25 bps rate hikes plus a 25 bps fed funds equivalent runoff of the Fed’s balance sheet. Rate hike timing highly data-dependent.

* Goldman Sachs (NYSE:) said it is raising its forecast to include seven consecutive 25 bps rate hikes at each of the remaining Federal Open Market Committee (FOMC) meetings in 2022 from a previous expectation of five hikes.

* BofA Global Research expects the Fed to hike rates by 25 bps at each of this year’s remaining seven meetings, unchanged from its previous outlook. However, it said there is a risk of a 50 bps hike in the Fed’s March policy meeting.

* HSBC’s said it expects the Fed to roll out a 50 bps hike in March and four more quarter-point rate rises in 2022.

* Deutsche Bank (DE:) said it expects the Fed to call a 50 bps hike in March plus five more 25 bps hikes in 2022, with a hike at all but the November meeting.

* J.P.Morgan said on Jan. 28 it expects five rate hikes in 2022, up from the four it estimated previously.

* Barclays (LON:) now expects the Fed to raise rates by 25 bps five times this year, up from three hikes forecast earlier.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investor

LEAVE A REPLY

Please enter your comment!
Please enter your name here