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Goldman Sees Risk Fed Will Tighten at Every Meeting From March

EconomyJan 23, 2022 02:36AM ET
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© Reuters Goldman Sees Risk Fed Will Tighten at Every Meeting From March

(Bloomberg) -- Goldman Sachs Group Inc. (NYSE:GS) economists said they see a risk the Federal Reserve will tighten monetary policy at every policy meeting from March, a more aggressive approach than the Wall Street bank currently anticipates.

The Goldman Sachs economists led by Jan Hatzius said in a weekend report to clients that they currently expect interest-rate hikes in March, June, September and December and for the central bank to announce the start of a reduction in its balance sheet in July.

But they said inflation pressures mean that the “risks are tilted somewhat to the upside of our baseline,” and there is a chance officials will act “at every meeting until the inflation picture changes.” 

“This raises the possibility of an additional hike or an earlier balance sheet announcement in May, and of more than four hikes this year,” the economists said. “We could imagine a number of potential triggers for a shift to rate hikes at consecutive meetings.”

Chair Jerome Powell and colleagues meet this week amid expectations they will signal a willingness to lift rates from near zero in March.

Among potential spurs for even tighter policy would be a further increase in long-term inflation expectations or another surprise on inflation, the Goldman Sachs economists said. 

They noted they had already been made more concerned about the inflation outlook by the arrival of the omicron variant and continued strength in wage growth.

©2022 Bloomberg L.P.

 

Goldman Sees Risk Fed Will Tighten at Every Meeting From March
 

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Comments (14)
Rod Quasney
Rod Quasney Jan 23, 2022 2:06PM ET
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And no matter what they do now, it's to little to late. Should have took difinitive action 6 months ago but instead lied with the "temporary" BS to prop up markets so the big boys had time to exit and go short.
Thomas Manning
Thomas Manning Jan 23, 2022 11:13AM ET
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Raise rates slow the economy… high inflation hurts
Gus McCrae
Gus McCrae Jan 23, 2022 9:02AM ET
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banks are getting pessimistic, that is a buy signal
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jan 23, 2022 7:39AM ET
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fed will do what I want them to do
Ronald Warren
Ronald Warren Jan 23, 2022 7:32AM ET
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Another ******in the inflation chain. As I'm sure you've heard, in California train cars are being looted at a rate of 90 per day. It may not sound like much, but that's 2,700 containers a month of cargo missing from the supply chain.
Ronald Warren
Ronald Warren Jan 23, 2022 7:25AM ET
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We have short term inflation coming like no one has imagined. The nation is short 80,000 truckers and currently many are sick or will get sick. I went grocery shopping yesterday and 25% of the shelves were empty. Shipping costs are going to slaughter us.
Alex Rodriguez
Alex Rodriguez Jan 23, 2022 7:25AM ET
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If you think its bad now, the vaccine mandates for truckers entering the US started today. Just you wait
Bigly Bird
Bigly Bird Jan 23, 2022 7:18AM ET
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Is it possible to just block everything Goldman says? If not, can we get a button?
Antonio Piccolo
Antonio Piccolo Jan 23, 2022 5:46AM ET
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If GS inform us about that means that probably it will not be so. Natural gas are already going down and WTI is too high. So inflation is destined to slow quicker than  expected
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jan 23, 2022 5:22AM ET
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Ask me, what is my Mandate. I will tell you.
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Jan 23, 2022 5:21AM ET
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I am giving the renewed Mandate for the US Federal reserve Bank; trust me they will do that.
 
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