Interest rate hikes in 2022 are happening and experts are weighing in on how many they expect from the Federal Reserve this year.
David Mericle and Jan Hatzius, economists with Goldman Sachs, are predicting a total of five interest rate hikes in 2022. Previously the financial company’s prediction was for four interest rate hikes this year.
So when does Goldman Sachs predicts those hikes are coming. The first two are expected in March and May. After that, we should see another three interest rate hikes in the second half of 2022 during the months of July, September, and December.
According to Goldman Sachs, these hikes should have interest rates sitting between 1.25% and 1.5% when 2022 comes to a close. It’s also worth noting that the firm expects the Fed to start reducing its balance sheet in June, reports Reuters.
BofA Global Research is also weighing in on the Fed’s interest rate plans with a higher estimate than Goldman Sachs. Economist Ethan Harris is predicting a total of seven interest rate hikes in 2022, or one at every remaining Fed meeting.
The BofA Global Research is estimating that each of these hikes will have the Fed increasing interest rates on a 25-point basis. Despite that, the firm also cut its GDP growth from 4% to 3.6%. It points to supply and demand issues as the cause behind this, MarketWatch notes.
Investors will have to wait until March to see how markets react to these interest rate hikes.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.