Goldman Sachs now thinks the Fed will hike rates four times in 2022 and start slashing its balance sheet in July

Goldman Sachs now thinks the Fed will hike rates four times in 2022 and start slashing its balance sheet in July

Goldman Sachs now thinks the Federal Reserve will hike interest rates four times in 2022 as it grapples with red-hot inflation, having previously penciled in only three rate rises. The Wall Street giant said in a Monday note it believes the Fed will start selling some of its assets as early as July. The central bank currently holds worth of bonds, mainly government ones. The rate hikes and balance-sheet reductions could prompt further volatility in stocks, by pulling down bond prices. That in turn would push up yields, making the securities look more attractive to investors. Stocks — particularly in speculative technology companies — as investors prepare for the US central bank to dial back its support for the economy and financial markets. Goldman said that recent positive economic data was likely to intensify Fed officials' concerns about inflation, which is running at a . The bank noted that unemployment from 4.2%, even though the jobs-added figure came in lower than expected. "The US labor market continues to make rapid progress," Jan Hatzius, the bank's chief economist, wrote in the note. "The strength of wage inflation also points to growing labor scarcity." Goldman thinks the Fed will hike interest rates