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Goldman Sees Risk Fed Will Tighten at Every Meeting From March

EconomyJan 23, 2022 08:24
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© Reuters

(Bloomberg) -- Goldman Sachs Group Inc. (NYSE:GS) economists said they see a risk the Federal Reserve will tighten monetary policy at every policy meeting from March, a more aggressive approach than the Wall Street bank currently anticipates.

The Goldman Sachs economists led by Jan Hatzius said in a weekend report to clients that they currently expect interest-rate hikes in March, June, September and December and for the central bank to announce the start of a reduction in its balance sheet in July.

But they said inflation pressures mean that the “risks are tilted somewhat to the upside of our baseline,” and there is a chance officials will act “at every meeting until the inflation picture changes.” 

“This raises the possibility of an additional hike or an earlier balance sheet announcement in May, and of more than four hikes this year,” the economists said. “We could imagine a number of potential triggers for a shift to rate hikes at consecutive meetings.”

Chair Jerome Powell and colleagues meet this week amid expectations they will signal a willingness to lift rates from near zero in March.

Among potential spurs for even tighter policy would be a further increase in long-term inflation expectations or another surprise on inflation, the Goldman Sachs economists said. 

They noted they had already been made more concerned about the inflation outlook by the arrival of the omicron variant and continued strength in wage growth.

©2022 Bloomberg L.P.

 

Goldman Sees Risk Fed Will Tighten at Every Meeting From March
 

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Comments (2)
Utkarsh sinha
Utkarsh sinha Jan 23, 2022 9:04
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Goldmans strategy os to ahort market hence this . Fed wont hike rates at ghis rate i can take 100 k bet from anyone. Ged is smarter than this . It wong hike interest rates for an inflation that is caused bh supply chain issues . Once corona goes away so will inflation automatically . Once permian oil starts flowing and investment happens there oil price will coek down amd so will inflation related to oil price . No need to increase rates .
David Hawley
David Hawley Jan 23, 2022 8:55
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Trying to force the market lower for their own clients
Alex Malmstrom
Alex Malmstrom Jan 23, 2022 8:55
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I think your tinfoil hat is on a little too tight, again.
Steven Hughes
Steven Hughes Jan 23, 2022 8:55
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Tactics used no doubt, but not in a report sent to their clients.
Bogdan Jarocinski
Bogdan Jarocinski Jan 23, 2022 8:55
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so what does it mean for gpb/usd tomorrow?
 
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