Three more interest rate hikes could come this year, top banks say

Goldman Sachs and Bank of America said they expect the U.S.

Goldman Sachs and Bank of America said they expect the U.S. Federal Reserve to raise interest rates three more times this year, lifting their estimates after data pointed to persistent inflation and a resilient labor market.

Producer prices accelerated in January by the biggest margin in seven months, according to data on Thursday, while a Labor Department report showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week.

“In light of the stronger growth and firmer inflation news, we are adding a 25bp (basis points) rate hike in June to our Fed forecast, for a peak funds rate of 5.25%-5.5%,” Goldman Sachs economists led by Jan Hatzius said in a note dated Thursday.

Meanwhile, money markets are currently pricing in a terminal rate of 5.3% by July.

BofA Global Research also expects a 25bps hike in the Fed’s June meeting, pushing the terminal rate up to a 5.25%-5.5% range.

https://www.nbcnews.com/business/economy/interest-rate-hikes-how-many-more-this-year-2023-rcna71227


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