Big US investment bank Goldman Sachs expects the Federal Reserve to raise interest rates in the US even more than previously thought. Economists expect interest rates to rise as much as 5 percent in March, 25 basis points higher than the Bank had previously forecast.
The Goldman Sachs report said the central bank continues to raise interest rates to counter “uncomfortably high” inflation in the US. In addition, according to the investment bank, the move is necessary to allow the economy to calm down.
The Fed will hold a policy meeting next Tuesday and Wednesday. It is then expected that interest rates will be revised upwards by 75 basis points for the fourth time in a row to counteract the high inflation in the US.
Betting on a less aggressive approach from the Fed this year has been a dangerous game for investors. Stocks have rebounded from lows several times based on that forecast, but were again crushed by new signs of persistent inflation or the central bank’s intent to keep pace with rate hikes.
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