U.S. to start raising interest rates from Sept 2022 – JP Morgan

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LONDON, Nov 18 (Businesshala) – The US Federal Reserve will begin raising interest rates from September 2022, economists at the country’s largest bank said in a 2022 outlook note.

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JPMorgan expects the central bank to increase rates by 0.25% from the third quarter of next year and keep them increasing by 25 basis points every quarter “at least until real rates drop to zero,” according to chief economist Mike Feroli. The leadership team wrote.

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The ten-year inflation-adjusted return, or “real return,” was down minus 1.12% on Thursday.

The bank’s forecast for the first Fed rate hike is a bit more conservative than some rivals such as Deutsche Bank, which expects the first US hike in early July 2022. Money markets expect the first increase in a similar time.

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Economists at JP Morgan expect US economic growth to average 3.5% in 2022, compared to 5.5% in 2021, and that full employment will be achieved by the middle of 2022.

Inflation is also expected to slow down in the coming quarters, with core prices projected to average 2.2% by Q3 2022, compared to 4.2% in Q4 2022.

“Supply constraints in the goods sector appear to be easing, and we expect that to continue into 2022,” the economists wrote.

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