Investing.com - Analysts at Barclays have said they now expect the Federal Reserve to raise interest rates later this month, and then twice more this year after Fed communication turned hawkish.
In its Global Economic Weekly report, Barclays said it now expects the Fed to hike rates at its March 14-15 meeting and again in September and December.
“As U.S. data have been solid but not exceptional, we believe the shift is driven by the improvement in financial conditions – specifically, the rally in equity markets – since the election, a rally that is evident to a greater or lesser degree in most major markets,” the report said.
Analysts said that given the tone of recent comments, they see the risks around this forecast tilted ever-so-slightly toward four hikes.
Barclays also boosted its assumption for rate hikes in 2018, saying it now expect hikes in March, June, and December of next year.
Fed Chair Janet Yellen said Friday a rate hike "would likely be appropriate" this month if employment and inflation continued to evolve in line with expectations.
"The process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016," she added.
The remarks cemented the view that the Fed will raise interest rates at its next meeting, following a series of hawkish comments by Fed policymakers earlier in the week.
Futures traders are pricing in around an 84% chance of a hike at the Fed's March meeting, according to Investing.com’s Fed Rate Monitor Tool.