Goldman Sachs predicts the Federal Reserve will raise rates at least four times in 2018, spurred by a tight labor market and higher levels of inflation.

The economy will continue to improve, spurred forward by the reconstruction following recent hurricanes and proposed tax cuts, Goldman economists wrote, according to an article by Reuters.

From the article:

“The U.S. economy heads into 2018 with strong growth momentum and an unemployment rate already below levels that Fed officials view as sustainable,” Goldman’s economists wrote in note dated Friday.

Other experts agree next year will see four rate hikes. Capital Economics recently released its prediction, saying next year’s change in Fed Chair won’t matter, rates will still be raised four times.

However, this is still more than Wall Street has been expecting for next year, the Reuters article explained, saying Wall Street’s top banks predicted the Fed will raise rates just three times in 2018.

From the article:

The U.S. central bank has raised rates twice this year and currently forecasts another hike in its benchmark lending rate from its current target range of 1.00 percent to 1.25 percent by the end of 2017.

The Mortgage Bankers Association also predicted rates will continue rising, saying mortgage rates could pass 4% or even 5% over the next few years.

Goldman also increased its current gross domestic product forecast, saying GDP will grow to 2.5% next year, and reach 3.5% by the end of 2019. The unemployment rate is predicted to fall to 3.7% by the end of 2018.

Most Popular Articles

FHA loan limits increasing for almost all of U.S. in 2020

Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020.

Dec 05, 2019 By

Latest Articles

When it comes to their home, Millennials are picky

According to a new data set from the National Association of Home Builders, Millennials care just as much (if not more) about they want in a house rather than what they need.

Dec 05, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please