Interest rates are likely to go higher than the Fed previously forecast with inflation remaining abnormally high, according to Goldman Sachs economists.
and a disappointing inflation report that pointed to the pervasiveness of high consumer prices, has raised the specter of a higher peak rate. rose 0.5% in January, the most in three months. The annual inflation rate also surprised to the upside at 6.4%.
That data has prompted some traders to reexamine their rate hike expectations for the year, with a growingnow betting the Fed could raise rates by higher than previously projected. About 58% of traders expect the Fed to increase the federal funds rate by another 75 basis points, while 17% expect rates to increase by a full percentage point, according to data from the CME Group's FedWatch tool.
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