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JPMorgan Economists Now Predict Fed to Raise Rates in September -Breaking

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© Bloomberg. Marriner S. Eccles Federal Reserve in Washington, D.C., U.S.A on Monday, Nov. 1, 2020 Continuing negotiations today, the Democratic leadership expressed optimism about the likelihood that two bills carrying White House economic agenda will be voted on by the caucus.

(Bloomberg) — JPMorgan Chase & Co. (NYSE:) economists said they now expect the U.S. Federal Reserve to raise interest rates next September, becoming the latest on Wall Street to jettison a forecast for the central bank to stay on hold through 2022. 

In a new outlook published to clients late Wednesday, JPMorgan’s U.S. economists led by Michael Feroli said that by the middle of next year the central bank’s goal of full employment will be satisfied. 

That will prompt the Fed’s policy-setting Open Market Committee to raise its benchmark rate from near zero in September with a further hike in December and one every subsequent quarter, the economists said. The economists predicted that the rises would stop when the inflation-adjusted rates are back at zero.

“When the facts change, the FOMC changes its mind,” said Feroli and colleagues. 

Investors sound more optimistic than economists. Goldman Sachs (NYSE 🙂 economists stated last month they expected the central bank’s July rate hike. They were joined by their counterparts at Morgan Stanley (NYSE: ) Still sees the Fed not changing rates for next year. 

JPMorgan’s economists said that Chair Jerome Powell would be reappointed by President Joe Biden for an additional four-year term. 

©2021 Bloomberg L.P.

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