Bank of America economists expect the Federal Reserve to hike interest rates at every meeting for the remainder of the year as central bank policymakers look to tackle inflation.
Bank of America economists expect theto hike interest rates at every meeting for the remainder of the year as central bank policymakers look to tackle the hottest inflation in nearly four decades.
"The Fed has all but admitted that it is seriously behind the curve," they wrote. "This should affect the economy with a lag, weighing on 2023 growth."Economists scrambled to update their outlook after the Fed said during its two-day, policy-setting meeting last week that it could "soon" raise rates for the first time in three years, paving the way for a March liftoff as policymakers seek to keep prices under control.
For months, the Fed has been wrestling with its dual mandate of stable prices and full employment. But the nation's jobless rate plunged to 3.9% in December, down from a pandemic high of 14.7%, while consumer prices surged 7.1% from a year ago, marking the fastest pace for inflation since 1982 as consumer demand confronts a shortage of goods caused by congested ports and other pandemic-induced disruptions in the supply chain.
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