Goldman Sachs expects Fed to raise interest rates 7 times in 2022

Goldman Sachs expects that the Federal Reserve will raise interest rates seven times in 2022 to contain the rise in U.S. inflation, rather than the five it had expected earlier.

Economists forecast that the Fed will raise the interest rate 25 basis points at seven consecutive meetings of the Federal Open Market Committee.

They added that there is a case to be made for a 50 basis point hike in March, given the combination of very high inflation, hot wage growth and high short-term inflation expectations.

Meanwhile, most Fed officials opposed a 50 basis point hike in March, thinking that the more likely path is a longer series of 25 basis points hikes instead.

The change of view comes after the US consumer price index report for January showed a 7.5% annual increase, the biggest since 1982.