Fed watchers are talking seriously about an interest rate hike before the Fed’s next formal meeting on March 16. Goldman Sachs said it now sees seven consecutive 25 basis point rate hikes at each of the remaining Fed policy meeting this year.
At the moment, Wall Street economists seem to be telling their clients “more hawkish than we thought five minutes ago.”
The consumer price index rose 0.6% in January, with broad based gains. The year-over-year rate rose to 7.5%, the highest level in 40 years.In the wake of the data, Goldman Sachs said it now sees seven consecutive 25 basis point rate hikes at each of the remaining Fed policy meeting this year. The investment bank’s earlier prediction was five hikes.
The talk about an inter-meeting rate hike before March 16 erupted late Thursday after St. Louis Fed President James Bullard said was open to having that discussion. March Chandler, forex analyst for Bannockburn Global Forex, said it will be difficult for Fed officials to get ahead of the curve of expectations.
Under the Fed’s QE program, the Fed is scheduled to release its schedule for the last month of asset purchases. However, Robert Perli, head of global policy at Piper Sandler, said the firestorm among Fed watchers felt like “much ado about little.”
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