The Strategist

JPMorgan forecasts nine consecutive Fed rate hikes

02/22/2022 - 06:19

The U.S. Federal Reserve will raise rates for nine consecutive meetings, economists at JPMorgan Chase predict.

JPMorgan Chase economists expect that the Federal Reserve (Fed) is likely to raise interest rates by 25 bps at nine consecutive meetings to try to lower inflation. 

That's what Bloomberg writes, citing an analyst report from a team led by economist Bruce Kasman. By early next year, the rate will move closer to neutral, economists said. 

U.S. inflation accelerated to 7.5 percent year-over-year in January, reaching a new high in 40 years. 

A "feedback loop" between strong growth, price pressures and private sector behavior could emerge, they said. This phenomenon will persist even if the intensity of current price pressures in the energy sector diminishes, economists believe.

The risk that central banks will change policy and realize the need to ensure slow growth is now the most serious threat to an otherwise favorable global background, economists said. As Bloomberg notes, their report came after a statement by Charles Evans, president of the Federal Reserve Bank of Chicago, who said that the current monetary policy is wrong and needs a significant adjustment because inflation has accelerated to a 40-year high.