Wall Street raises interest rate hike expectations as inflation hits new high

1) Goldman sachs forecasts three rate increases in 2022, followed by two a year starting in 2023, while expecting inflation to fall to just over 2 per cent.

2) JP Morgan: the Fed may bring forward its first interest rate hike to June next year and expects it to accelerate the pace of tapering its asset purchases, ending in March.

3) Ubs said the taper would end in March and inflation would remain high over the same period. The Fed is expected to begin shrinking its balance sheet in June and raise interest rates for the first time in September.

4) Morgan Stanley changes its view and believes that core inflation will fall from its peak in 2022Q1. Two hikes are expected in 2022, 3.5 in 2023 and three in 2024.

5) Bank of America says the Fed could start raising interest rates at its December meeting. If not, markets are pricing in a 50 basis point rise in March.

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