Analysts at Goldman Sachs make a case for rate hikes at all seven remaining Fed meetings this year, in the face of soaring inflation.

Key quotes

“We are raising our core PCE inflation forecast to 3.7% at end-2022 (vs. 3.1% previously) and 2.4% at end-2023 (vs. 2.2%).”

“Accounting for a wider CPI-PCE gap, this implies 4.6% headline CPI inflation at end-2022 and 2.9% at end-2023.”

“A very high inflation path in 2022 should make an easy case for steady rate hikes at all seven remaining FOMC meetings.”

“In light of our higher inflation forecast for 2023, we now expect four additional quarterly hikes next year (vs. three previously), resulting in a slightly higher terminal funds rate of 2.75-3%.”