Bank of America, Goldman Sachs, JPMorgan, UBS Share Predictions About Further Fed Rate Hikes Cryptocurrencies and ICOs

Bank of America, Goldman Sachs, JPMorgan and UBS have shared their predictions that the Federal Reserve will raise interest rates further. Bank of America and Goldman Sachs, for example, now expect the Fed to raise interest rates three more times this year.

Major Banks Predict More Fed Rate Hikes

As the US Federal Reserve continues its fight against inflation, several major banks including Bank of America, Goldman Sachs, UBS and JPMorgan have shared their predictions for how much more the Fed will raise interest rates this year. .

Goldman Sachs said in a note Thursday that it now expects the US central bank to raise interest rates three more times this year after data released Thursday pointed to persistent inflation and a resilient job market. The bank, which previously forecast 25 basis point rate hikes at the Fed’s March and May meetings, now expects another rate hike in June. The firm’s economists, led by Jan Hatzius, head of the Global Investment Research Division and chief economist, detailed:

In light of the stronger growth and firmer inflation news, we will add a 25bp (basis points) rate hike in June to our Fed forecast, for a top funds rate of 5.25%-5.5 %.

Bank of America Global Research also expects to see three more increases in interest rates from the Federal Reserve this year. The bank previously said it expected the Fed to raise interest rates by 25 basis points each at its March and May meetings. Bank of America now expects another 25 basis point rate hike at the June Fed meeting, which will push the terminal rate into a 5.25%-5.5% range. The bank explained in a client note this week:

A resurgence in inflation and strong job gains mean the risks to this outlook (just two interest rate hikes) are too one-sided for our liking.

European investment bank UBS also said it expects the Federal Reserve to raise interest rates by 25 basis points at its March and May meetings, which may leave the federal funds rate in the 5-5% range, 25% While most people don’t expect the Federal Reserve to cut interest rates this year, UBS estimated that the US central bank would cut interest rates at its September meeting. The global investment bank recently wrote in a client note:

We expect the FOMC (Federal Open Market Committee) to turn around and start cutting interest rates at the September FOMC meeting.

Meanwhile, JPMorgan Chase forecast the terminal rate at 5.1% for the end of June. JPMorgan CEO Jamie Dimon said in an interview with Reuters last week that the Federal Reserve could raise interest rates above the 5% mark. Emphasizing that it is too soon to declare victory against inflation, Dimon opined:

It is perfectly reasonable for the Fed to go to 5% and wait a bit.

However, if inflation goes down to 3.5% or 4% and stays there, “it may have to go higher than 5% and that could affect short rates, long rates,” the JPMorgan executive warned. .

Federal Reserve Chairman Jerome Powell and several other Fed officials have said more interest rate hikes are needed to curb inflation. A Reuters poll published on Tuesday showed that 46 of 86 economists have forecast the Federal Reserve will raise interest rates by 25 basis points in March and May.

Do you agree with Bank of America, Goldman Sachs, UBS, or JPMorgan about the Fed raising interest rates further? Let us know in the comments section.

kevin helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.