JPMorgan expects 9 rate hikes from Fed

JPMorgan Chase has joined the banks that have recently increased their expectations for the number of Fed rate hikes. The team, led by the bank's chief economist, predicted in their research note that the Fed will raise interest rates by 25 basis points at each meeting it will hold in the remainder of the year.

21.02.2022 - 10:50

JPMorgan Chase & Co. Economists said the Fed is likely to raise interest rates by 25 basis points over nine consecutive meetings in an effort to curb inflation.

The bank joins Wall Street banks that have increasingly bought in the prospect of faster monetary tightening, after US inflation jumped the most since 1982 in January. Goldman Sachs, which previously stated that it expects five increases for 2022, also increased its forecast to seven.

"We expect the Fed to raise the policy rate by 25 basis points at each of the next nine meetings to a neutral level early next year," the JPMorgan economics team, led by chief economist Bruce Kasman, said in a past research note.

Using the expression "a big surprise on the upside" regarding the US January data, economists said, "We do not see a slowdown in the record-breaking pace of the last quarter from now on".

Economists also touched upon the issue of inflation and stated that "even if the current price pressures in the energy sector diminish, a cycle that feeds each other between strong growth, cost pressures and private sector behavior can take root."

Chicago Fed President Charles Evans, speaking on Friday, used the report, “Central Banks' decision change and acceptance that slower growth should be created, and the impact of this situation on global financial conditions, stands out as the biggest threat to the otherwise healthy global backdrop at the moment.” 's comments on the notable policy change.

Speaking at a conference in New York hosted by the Chicago Booth School of Business, Evan referred to the highest inflation in the last 40 years and said, "The current stance of monetary policy is wrongly based and requires significant adjustments."