The U.S. economy is heading into 2018 with strong momentum that’s likely to boost wages and inflation more broadly, requiring the Federal Reserve to raise interest rates four times next year, Goldman Sachs Group Inc. economists said in a research note.
The New York-based investment banking and securities firm raised its growth outlook for 2018 to 2.5 percent and lowered its forecast for unemployment to 3.7 percent by the end of 2018, said Goldman chief economist Jan Hatzius, a co-author of the note, which was released by email late Friday.
Before the latest revision the most recent Goldman Sachs forecast for 2018 growth was 2.4 percent, according to forecasts compiled by Bloomberg.
The U.S. jobless rate, which was 4.1 percent in October, may reach 3.5 percent in late 2019, Goldman predicted. That would be the lowest level since the late-1960s.
“Our projections would imply an evolution over the current cycle from the weakest labor market in postwar U.S. history to one of the tightest,” the economists said in a summary of their report. “We expect that a tight labor market and a more normal inflation picture will lead the Fed to deliver four hikes next year.”
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Goldman Sachs Sees Four 2018 Fed Rate Hikes as U.S. Growth Gains published first on http://www.noteseminars.com/
Goldman Sachs Sees Four 2018 Fed Rate Hikes as U.S. Growth Gains published first on http://www.noteseminars.com/
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