New inflation forecast from Goldman Sachs

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St. Louis Fed President called for a sharp increase in interest rates to the 3%-3.25% band, while Chicago and Atlanta Fed presidents stated that they are in favor of increasing the rates to the neutral level calculated as 2.4%.

Goldman expects US inflation to fall below 4%. Approving the fifth package of sanctions against Russia, the EU banned coal imports from the country.

While the number of coronavirus cases broke new records in China, the harsh quarantine measures implemented in Shanghai caused reactions. Global stock markets are mixed with Bullard’s statements and measures in China, while the Bloomberg Dollar Index is at its highest level since 2020.

Fed officials

St. Louis Fed President James Bullard stated that he is in favor of a sharp increase in interest rates to combat inflation, which has risen to the highest level in the last 40 years in the USA, and called for a reduction in the Fed balance sheet, as well as raising interest rates by 50 basis points in May.

Bullard said, “I want the Federal Open Market Committee (FOMC) to reach the 3%-3.25% band in the policy rate in the second half of this year.”

Bullard, who said that he did not want to prejudge the May rate decision and that he would evaluate the new data to be announced, noted that he was in favor of a higher increase in the previous FOMC meeting, where the Fed increased interest rates by 25 basis points. Bullard stated that he may adopt a similar stance at the next meeting.

Chicago Fed President Charles Evans and Atlanta Fed President Raphael Bostic made more dovish statements. Evans and Bostic made separate statements and stated that they were in favor of raising the interest rate to the neutral rate, which Fed officials calculated as approximately 2.4%, as the economy continued to be healthy.

US inflation forecast

Goldman Sachs Group Inc. He expects inflation in the US to fall below 4% this year, while the rise in stocks remains relatively flat. “We think US inflation is currently peaking,” said Meena Lakdawala-Flynn, the bank’s co-director of private wealth management.

We are of the opinion that the probability of a recession in 2023 is also increasing,” he said. Lakdawala-Flynn, stating that their customers are turning to investment instruments related to health, energy, technology and real estate, said, “We recommend our customers to choose names that have pricing power and strong margins among the shares.” Lakdawala-Flynn added that the interest in cryptocurrencies and NFTs continues.

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