– Wells Fargo expects the U.S. Federal Reserve to raise interest rates four times this year, the bank said on Thursday, while downgrading its 2022 growth forecast for the world’s biggest economy on growing threats from the Omicron variant of the coronavirus.
Wells Fargo economists expect the first rate increase in March, when the Fed is also slated to end its monthly bond purchase program, followed by hikes in every subsequent quarter this year and three in 2023.
The bank joins other big names on Wall Street including Goldman Sachs and JPMorgan in predicting an aggressive tightening of U.S. monetary policy to tackle inflation which is running at its highest in nearly 40 years.
Wells Fargo now expects U.S. GDP to grow 3.9% in 2022, down from last month’s forecast of 4.4%. First-quarter growth is expected to come in at 2.9%.
(Reporting by Devik Jain in Bengaluru; Editing by Vinay Dwivedi)