- Predictions from Major Banks: Bank of America, Goldman Sachs, UBS, and JPMorgan have all shared their predictions about the Federal Reserve raising interest rates further.
- Bank of America & Goldman Sachs: Bank of America and Goldman Sachs now expect the Fed to raise interest rates three more times this year.
- UBS Prediction: UBS is estimating that the U.S. central bank would ease interest rates at its September meeting.
Predictions from Major Banks
As the U.S. Federal Reserve continues its fight against inflation, several major banks — including Bank of America, Goldman Sachs, UBS, and JPMorgan — have shared their predictions about how much more the Fed will raise interest rates this year.
Bank of America & Goldman Sachs Predictions
Goldman Sachs said in a note Thursday that it now expects the U.S. central bank to raise interest three more times this year after data released Thursday pointed to persistent inflation and a resilient labor market. The bank, which previously predicted 25-basis-point rate increases in the Fed’s March and May meetings, now expects another rate hike in June. Bank of America Global Research similarly expects to see three more interest rate increases from the Federal Reserve this year. The bank said earlier that it expected the Fed to raise interest rates by 25 basis points each in its March and May meetings. Bank of America now expects another 25-basis-point rate hike in the Fed’s June meeting, which will push the terminal rate up to a 5.25%-5.5% range.
UBS PredictionEuropean investment bank UBS also said it expects the Federal Reserve to raise interest rates by 25 basis points at its March and May meetings, which may leave the Fed funds rate at the 5%-5.25% range. While most people are not expecting the Fed to cut interest rates this year, UBS estimated that the U.S. central bank would ease interest rates at its September meeting..
JPMorgan Chase PredictionJPMorgan Chase has forecastedthe terminal rate at 5%-5 .25 % for 2021 . It believes that if economic growth remains strong , there could be an increase in inflation , resulting in additional hikes by 2023 .
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The major banks have made their predictions on potential future hikes by Federal Reserve . With rising inflation , these banks believe there could be additional hikes over 2021-2023 depending on economic growth .