The echo of Jerome Powell’s words can still be heard on the markets. The Federal Reserve chairman made it clear yesterday that inflation in the United States is too high and that monetary tightening of more than 25 basis points may be required in one meeting or at multiple meetings.
Words that reinforced investors’ belief that the upcoming Fed meeting in May marks a US rate hike of 50 basis points, after the first hike since 2018 announced on March 16, equal to 25 basis points, which led to the cost of borrowing. at the range between 0.25% and 0.50%.
What outlook now for the cost of money overseas? Goldman Sachs revised US rate forecasts upward, estimating two 50bp monetary tightenings in the next two meetings of the Fed’s monetary policy arm, in May and June, followed by 25bp hikes at the remaining four meetings. in the second half of 2022 and three quarterly increases in 2023. At the end of the cycle, rates are expected at 3-3.25%. “We continue to expect the FOMC to announce the start of the budget cut at the May meeting, but after the latest comments we don’t believe this is necessarily a barrier to achieving a 50bp hike in May as well,” explains the company. US business.