Hike rates

Morgan Stanley expects the Fed to hike rates 6 times in 2022

Morgan Stanley’s logo is seen on the floor of the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., August 3, 2021. REUTERS/Andrew Kelly

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Feb 17 (Reuters) – Morgan Stanley (MS.N) expects the U.S. Federal Reserve to raise interest rates six times this year for a total of 150 basis points, a faster-than-expected increase, according to a bank research report on Thursday.

Major investment banks have forecast a series of increasingly steep interest rate hikes for 2022 after warmer-than-expected inflation data intensified pressure on the Fed to take a tougher stance. firm against soaring prices.

“Following recent changes to our inflation outlook, we now expect the Fed to make a total of six 25 basis point hikes this year,” wrote Morgan Stanley chief US economist Ellen Zentner. States, in the report.

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The Fed is expected to raise rates by 25 basis points at the end of its March policy meeting, followed by further hikes of 25 basis points in May, June and July, with two more hikes in September and December, according to Morgan Stanley.

Data from last week showed US consumer prices rose at their fastest pace since the early 1980s, fueling market speculation for a steep 50 basis point rise since the Fed meeting. March 15 and 16.

Morgan Stanley previously said a policy tightening of 125 basis points this year would be “appropriate”.

The current effective target for federal funds is 0-0.25%.

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Reporting by Noel Randewich; Editing by David Gregorio

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