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• Goldman expecting 75 basis point rate hikes in June and July, 50 basis points in September, and 25 basis point hikes in November and December
Wall Street is anticipating an even faster pace of interest rate hikes as US Federal Reserve is exploring the idea of a 75 basis point rate hike, CNBC reported.
The red hot inflation in all of four decades will push the central bank to raise interest rates more aggressively this year.
Changes in the economic outlook and running well ahead of the Fed’s 2% goal could influence a more significant rate move, which is expected to be announced after the two-day meeting that concludes Wednesday.
The fed funds rate feeds through to many consumer products
Goldman Sachs has also altered its own expectation of a 50 basis point move to 75.
The bank’s economists now foresee consecutive 75 basis point rate hikes in June and July and a 50 basis point move in September, and 25 basis point moves in November and December.
Fed’s rate hikes are anticipated to take the fed funds rate to a range of 3.25%-3.5% by the end of the year to tamp down the consumer demand, which has generated inflation levels running at more than 40-year highs.
The consumer price index (CPI) report published on Friday showed headline inflation in May running at an 8.6% pace.
Picture Credit: PYMNTS
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