Economists at UK banks Barclays and NatWest believe that the Federal Reserve The US could pick up the pace of interest rate hikes in March, rising by half a point, following Friday’s data from a key inflation gauge.
natwest said on Friday that it also expects increases of 25 basis points in the May and June meetings, which would take the terminal rate to 5.75%, compared to a previous estimate of 5.25%.
“Given the inflationary backdrop (on Friday), and the fact that our monthly core inflation profile now shows the Fed’s preferred core PCE deflator to be above 4% yoy through July, we are raising our forecast for the terminal rate of fed funds at 5.75%”, said in a note the chief economist of NatWest Markets for the United States, Kevin Cummins.
Barclays also said on Monday that lingering inflationary pressures and economic resilience could lead the Fed to raise rates by 50 basis points next month, especially if nonfarm payrolls data to be released before the Fed meeting Fed in March are solid.
“The bond market has gone ‘higher for longer’, fueling negative reactions in creditthe bank said.
Economic data had indicated that inflation was beginning to slow, prompting the Fed to cut its hike to a quarter point at its January 31-February 1 policy meeting, but the numbers since then may have questioned the opinion of the president of the entity, Jerome Powell, that the “disinflationary process” had begun.
NatWest and barclaysas well as other banks, including Goldman Sachs, believe that the Fed will continue to raise rates.
Source: Reuters
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
