Economics
Wall Street Lifts Fed Forecasts; Citi Sees Four Half-Point Hikes
- Higher inflation could push Fed to act even more aggressively
- Citi expects benchmark rate to reach as high as 3.75% in 2023
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Wall Street banks increasingly expect the Federal Reserve to raise interest rates more aggressively than policy makers are projecting, with Citigroup Inc. economists now seeing four straight half-point moves amid persistent inflation.
Citigroup now expects 2.75 percentage points of increases this year and more in 2023, taking the benchmark rate to a range of 3.5% to 3.75%, analysts led by Andrew Hollenhorst said in a research note Friday. That’s well beyond the 2.8% level that central bankers expect to reach, based on the median of projections released last week.