Wall Street now expects four Fed hikes

Molly wealth talk joined discussion · Jan 10, 2022 17:47

According to the CME FedWatch Tool, traders are currently anticipating a 29.7% chance for a rate hike at the Fed's December meeting which is different from last week.

Because of the jobs market progress, Wall Street now expects four fed hikes rather than three.

Source: CME FedWatch Tool, as of Jan.10,2022

Analysts at Goldman Sachs foresee four interest rates hikes by the Fed in 2022, in light of the December FOMC meeting's minutes. "Cite rapid jobs market progress and hawkishness in the December FOMC minutes.We are therefore pulling forward our runoff forecast from December to July, with risks tilted to the even earlier side.With inflation probably still far above target at that point, we no longer think that the start to runoff will substitute for a quarterly rate hike."

Goldman Sachs continues to see hikes in March, June, and September, and has now added a hike in December.

Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., wrote in a note Friday:“We now see liftoff in March, followed by a quarterly pace of hikes thereafter.”

Therefore, some investors are afraid of hawkish Fed and choose financial and energy sectors rather than growth stocks.

What do you think of that?

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