Goldman Sachs expects four rate hikes from the Fed in 2022

According to Goldman Sachs Group Inc., the US Federal Reserve will most likely raise interest rates four times this year and will start shrinking its balance sheet by July at the latest. In the research note written by Jan Hatzius, it was reported that the recovery in the US labor market and the hawkish signals in the minutes of the Fed meeting on December 14-15 point to a faster normalization. Hatzius said, "As the risks point to an earlier period than before, we are reducing our balance sheet reduction forecast from December to July. At this point, inflation will most likely be far above the target. We added December to the interest rate hikes we expect to see increase four times; in March, June, September and December." During the Fed's 14–15 December meeting, Fed officials stated that the possibility of an interest rate hike earlier than expected was due to rising inflation and the strong improvement in the employment market. Unemployment in the US fell from 4.2 percent to 3.9 percent last month.