Factbox: What global banks are planning for Fed rate hikes in 2022

The Federal Reserve Building is seen in Washington, U.S., October 20, 2021. REUTERS/Joshua Roberts

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Feb 11 (Reuters) – Major investment banks have forecast a strong round of interest rate hikes for 2022 after warmer-than-expected inflation data intensified pressure on the Federal Reserve to adopt a firmer stance against soaring prices.

Thursday’s data showed U.S. consumer prices rose at their fastest pace since the early 1980s, fueling market speculation for a steep 50 basis point rise since the Fed’s 15-day meeting. and March 16. Read more

The current effective target for federal funds is 0-0.25%.

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As the Fed prepares to hike rates in the pandemic era, here are estimates from the world’s leading investment banks on how big and how fast rates will rise:

* Citi now expects a 150 basis point tightening this year, starting with a 50 basis point move in March, followed by four quarter-point increases in May, June, September and December.

* Credit Suisse now expects the Fed to hike a cumulative 175 basis points this year, starting with a 50 basis point increase at the next March meeting.

* Societe Generale now expects five rate hikes of 25 basis points this year, starting in March.

* Morgan Stanley says policy tightening of 125 basis points this year is “appropriate” and will come in the form of four 25 basis point rate hikes plus an equivalent 25 basis point outflow of fed funds of the Fed’s balance sheet. The timing of the rate hike is highly data dependent.

* Goldman Sachs said it was raising its forecast to include seven consecutive 25 basis point rate hikes at each of the remaining Federal Open Market Committee (FOMC) meetings in 2022 from a previous expectation of five hikes. Read more

* BofA Global Research expects the Fed to hike rates by 25 basis points at each of the remaining seven meetings this year, unchanged from its previous outlook. However, he said there was a risk of a 50 basis point hike at the Fed’s monetary policy meeting in March.

* HSBC said it expects the Fed to hike 50 basis points in March and four more quarter-point rate hikes in 2022.

* Deutsche Bank said it expects the Fed to call a 50 basis point hike in March and five more 25 basis point hikes in 2022, with one hike at all but the November meeting.

* JPMorgan said on Jan. 28 it expects five rate hikes in 2022, up from four previously estimated.

* Barclays now expects the Fed to raise rates by 25 basis points five times this year, up from three hikes expected earlier.

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Reporting by Aniruddha Ghosh in Bengaluru and Jamie McGeever; Editing by Devika Syamnath and Lincoln Feast.

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