Inflation is so hot the Fed may have to hike interest rates like it’s 1994
By Matt Egan, CNN Business
Inflation is so hot that Wall Street banks are falling over each other to predict the dramatic moves the Federal Reserve will have to make to cool prices off.
Goldman Sachs raised eyebrows earlier this week by forecasting the Fed will raise interest rates by a half a percentage point in each of the next two meetings.
Morgan Stanley and Jefferies quickly endorsed that view, even though the Fed hasn’t done a rate hike of that size at a single meeting since 2000.
Now, Citigroup is upping the ante. Citi economists said Friday they expect the Fed will boost interest rates by a half a percentage point during each of the next four meetings. And Citi left the door open for even more aggressive steps, such as big rate hikes at every remaining meeting this year.
The aggressive call underscores the level of concern about the inflation outlook, which has darkened considerably in recent weeks because of Russia’s invasion of Ukraine and the ensuing spike in food, energy and other commodity prices.
LOOKOUT HERE COMES THE BIG ONE
